November 10, 2017 / 12:52 PM / a month ago

Russia's Alfa interested in buying Cukurova's Turkcell stake - sources

ISTANBUL, Nov 10 (Reuters) - Russia’s Alfa Telecom is interested in increasing its stake in mobile operator Turkcell by buying out Turkish firm Cukurova, which missed a recent debt repayment and could consider offers, two sources close to the matter told Reuters.

If the offers are attractive, Cukurova may consider selling its 13.8 percent stake in Turkcell, given as collateral to Turkey’s Ziraat Bank in 2014, in order to pay a $1.6 billion loan from the bank. The three-year grace period on the 10-year loan has expired, the sources said.

After having failed to fully pay the first installment of its debt to Ziraat, pressure to find cash to complete the payment is pushing Cukurova to consider selling the stake.

Under an agreement signed in 2015, Cukurova has to ask Alfa first. Sources say Cukurova may also be interested in selling to other buyers.

Turkcell has been hampered by a long running feud between three of its shareholders: Cukurova, owned by Turkcell founder Mehmet Emin Karamehmet, Russian billionaire Mikhail Fridman’s Alfa Telecom and Sweden’s Telia Company.

Fridman’s LetterOne indirectly holds 13.2 percent of Turkcell, while Karamehmet’s Cukurova indirectly holds a 13.8 percent stake. Telia owns 24 percent. As part of Turkcell’s labyrinthine share structure, Fridman’s interests are held through a subsidiary, Alfa Telecom Turkey.

Cukurova, Ziraat and Turkcell declined to comment. LetterOne said: “We never comment about any market or arbitration rumours.” (Reporting by Can Sezer and Ebru Tuncay; Writing by Tuvan Gumrukcu)

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