Turkish Cukurova sues Alfa for all Turkcell shares: Sources

ISTANBUL

Turkish Cukurova Holding has applied to the London Court of International Arbitration for an order to enable the purchase of all shares held by Alfa in Turkcell, sources familiar with matter claimed on Monday.

Under Turkcell’s complex share structure, Russia’s Alfa Group, Turkey’s Cukurova Holding, state-controlled Ziraat bank, and Nordic TeliaSonera indirectly own parent company Turkcell Holdings. 

Cukurova, which is owned by Turkish billionaire Mehmet Emin Karamehmet, has sued the Alfa Telekom, owned by the Russia oligarch Mikhail Fridman, in The London Court of International Arbitration, claiming Alfa tried to benefit from infighting between TeliaSonera and Turkcell, and that this was contrary to its partnership agreement.

On March 17, Alfa Telecom Turkey offered a $2.8 billion bid to buy a 13.76 percent controlling stake in Turkcell, Turkey's largest mobile phone operator. This offer has been formally refused by the shareholders. 

"It is highly unlikely, for strategic and national security reasons, that the government, through the state-owned bank, would let the Turkish controlling shareholder sell its stake to a Russian (or any other foreign) entity," said Ondrej Cabejsek, an analyst at Czech firm Wood & Company Financial Services, in a note published on March 26.

The court case was brought before the Alfa’s bid of $2.8 billion according to sources. If the court recognizes Cukurova’s claims, the amount to be paid to Russian Alfa would be around $2 billion.

Cukurova is currently negotiating with a public lender in Turkey for the financing of the share purchase, the sources say.

Turkcell shareholders held a meeting late on March 26 and voted for payment of dividends that had not been distributed since 2010 due to power struggle between shareholders for the management of the company.

“The distribution to shareholders will take place by April 6, 2015 at the latest,” the statement said. The total for the four years through 2014 is close to 4 billion Turkish liras ($1.5 billion), said in the statement from Turkcell.