March 25, 2016 / 4:40 PM / 3 years ago

Russia's Alfa Telecom says ready to sell Turkcell stake for $2.7 billion

Pedestrians walk past by the main Turkcell shop in central Istanbul, Turkey, January 18, 2016. REUTERS/Murad Sezer

ISTANBUL (Reuters) - Russia’s Alfa Telecom said on Friday it was ready to sell a 13.22 percent indirect stake in Turkcell (TCELL.IS) (TKC.N) to Turkey’s Cukurova and Ziraat Bank for a total of around $2.7 billion, according to a statement to the Istanbul bourse.

The announcement is the latest twist in a dispute over control of Turkey’s top mobile operator which stretches back almost a decade, a tussle that has prevented some dividends from being paid and hampered the company’s development.

Alfa, part of Russian billionaire Mikhail Fridman’s business empire, has been locked in a legal battle with equity partner Cukurova, run by Turkcell’s founder Mehmet Emin Karamehmet.

Alfa said on Friday it was willing to sell 49 class-A shares in Cukurova Telecom Holdings Limited for $54.9 million per share, equivalent to 13.22 percent of Turkcell.

Two years ago, an international arbitrator ordered Alfa to return a separate 13.8 percent stake to Cukurova for $1.6 billion. Strapped for cash, Cukurova financed the purchase with a loan from state-owned Turkish lender Ziraat Bank [TCZIR.UL], which it has yet to repay.

Two sources close to the dispute said the court battle was expected to be concluded in the coming weeks and that Alfa’s announcement appeared to be a strategic move, by putting pressure on Cukurova to either find the funds to buy the additional stake and gain control or concede defeat.

Officials from Alfa and Cukurova in Turkey could not immediately be reached for comment.

Reporting by Can Sezer, Ceyda Caglayan and Asli Kandemir; Writing by Nick Tattersall; Editing by Ece Toksabay and Mark Potter

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