December 8, 2017 / 8:43 AM / a year ago

Turk Telekom CEO to take hard line on spending, focus on paying out dividends

ISTANBUL (Reuters) - Turk Telekom has no plans to take on new debt and aims to keep capex spending to a minimum under a new five-year strategy, its chief executive told Reuters, as it focuses on paying out dividends.

The plan comes as ongoing concerns about Turk Telekom’s top shareholder, the Saudi-backed Oger Telecom, have cast a shadow on Turkey’s largest fixed-line operator.

Oger has missed the last three payments on a $4.75 billion loan, while the Turkish government wants to see Turk Telekom, the operator of the national telecoms grid, owned by a financially stable company, sources have told Reuters.

“We are not going to borrow for our business plan,” Chief Executive Paul Doany told Reuters in an interview on Thursday. “I need the right capex on the fixed line. I have to be very efficient, cost effective.”

He said Turk Telekom aimed to keep its net debt at two times EBITDA (earnings before interest, tax, depreciation and amortization) as it seeks to continue to pay out dividends.

“Ideally (the net debt to EBITDA ratio) would be 1.5, and maximum it is 2.5, if you are dividend-paying company,” he said. “We need to be dividend paying company.”

Writing by Ali Kucukgocmen; Editing by David Dolan

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