Telia Company is selling its stake in Turkcell Holding to the state-owned Turkey Wealth Fund (TWF) for US$530 million.
The Swedish group holds a 47.1% stake in the holding company, which in turn owns 51% of Turkey’s market leading mobile provider Turkcell. The deal is subject to regulatory approvals and Turkcell’s annual general meeting, but if it receives clearance it will likely close in the second half of 2020. The final agreement resolves all shareholder disputes and litigations relating to both Turkcell and Turkcell Holding.
Telia CEO Allison Kirkby said: “Through this divestment, we unwind a long-lasting legal deadlock; we reduce risk, improve leverage and increase liquidity which will generate better shareholder returns in our core markets.”
TWF has signed separated agreements with Turkcell’s three largest shareholders - Cukurova Group, LetterOne and Telia – along with Ziraat Bank. These agreements will make TWF responsible for appointing five of Turkcell’s nine board members, as well as making it the operator’s largest shareholder with a 26.2% stake.
Cukurova Group will divest its indirect 13.8% holding and exit Turkcell, while LetterOne will increase its current 13.2% indirect stake to 24.8% equity, becoming Turkcell’s second largest shareholder. TWF stated that the board structure will become “more stable and transparent” after years of shareholder disputes.
Turkcell will remain listed on both the New York Stock Exchange and the Borsa Istanbul, with 49.0% of its shares in free float. In addition to its market leading mobile operation in Turkey, Turkcell is the country’s second ranked fixed broadband provider and also operates units in Belarus, Germany, Northern Cyprus and Ukraine.