Cukurova Again Given More Time to Resolve Turkcell Shareholder Dispute
Published on: 6th Feb 2014
By: Ian Mansfield
Turkish conglomerate Cukurova Holding has secured another delay in the court ordered repayment of a loan that will enable it to retain control over the country's largest mobile network Turkcell.
Cukurova put its shares in Turkcell up as collateral for a US$1.35 billion bank loan from Altimo back in 2005, but then defaulted on the repayments. The two sides have been fighting in the courts over the details of the loan ever since.
Last year, Cukurova won a compromise deal that enabled it to recover the shares, but only if it repaid the loan, but had since struggled to raise the necessary funds and has twice sought a delay in the court order.
The UK's highest court the Privy Council, which has been hearing the dispute ruled that Cukurova now has 60 days after a ruling in a separate case being held in the USA.
The Judicial Committee of the Privy Council added that it would be useful if the US court were able to reach its in a separate dispute with TeliaSonera decision soon.
Around US$3 billion worth of shareholder dividends are locked up in the company and cannot be paid out until the shareholding issue is finally settled.
In the USA dispute, an International Chamber of Commerce Arbitral Tribunal awarded TeliaSonera US$932 million in damages, plus interest and costs, for Çukurova's failure to deliver to TeliaSonera the Turkcell Holding shares as required under a share purchase agreement between the parties.
Although TeliaSonera is the largest direct shareholder in Turkcell, with a 38 percent stake, it is Cukurova that has management control with a much smaller stake thanks to a complex shareholding arrangement.
If and when the US court case is settled, that should trigger the 60-day countdown to Cukurova either paying up and keeping the shares, or losing control of Turkcell at last.
On the web: JCPC
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