Turkey Wealth Fund (TWF), the sovereign wealth fund (SWF) of the country, is considering a majority takeover of fixed and mobile operator Turk Telekom or Turk Telekomunikasyon (TT), according to a report by Bloomberg.
Creditors seized a 55% stake in Turk Telekomunikasyon almost three years ago after its previous owner defaulted on a multi-billion-dollar loan. The sovereign fund approached the lenders about acquiring the holding.
The report quoted sources saying that the SWF has yet to make a formal offer to TT’s controlling banking consortium, which acquired the ownership in a 2018 debt swap with the intention to sell to a strategic investor. The stake could be worth around USD1.6 billion based on its current market price, according to data compiled by Bloomberg.
Meanwhile, Turkish banks have said they are constantly considering options for their stake in TT.
“Our bank is in continuous consideration regarding its options on the mentioned shares,” Akbank, Garanti Bank, and Isbank said separately in identical statements following the Bloomberg report. The banks said there had been no transaction with the wealth fund yet.
According to Daily Sabah, OTAS, a unit of Dubai-based Oger Telecom, had taken out a $4.75 billion loan in 2013 to acquire a 55% stake in Turk Telekom. But it failed to keep up payments on what at the time was Turkey’s largest corporate loan. Among the creditor banks, Akbank extended $1.5 billion, Garanti lent it some $1 billion, and Isbank some $500 million.
A consortium of banks took over the 55% stake in TT in 2018. The ownership was transferred to a special purpose vehicle (SPV), Levent Yapılandırma Yonetimi (LYY) Telekomunikasyon A.Ş. Akbank is the biggest shareholder in LYY with 35.6%, followed by Garanti Bank and Isbank.