Turkcell will be getting an investment injection following an agreement signed between Russian firms Alfa and VTB.
The Russian group confirmed that their agreement was an intention of investment since it will allow Alfa, which is controlled by Russian billionaire Mikhail Fridman, to increase its holding in Turkcell.
Alfa already holds a stake in the Turkish market leader and has been clashing over the operator’s ownership structure with Cukurova – the equity partner of Turkcell founder Mehmet Karamehmet – for over ten years.
The ownership dispute is now on course to be resolved this month – marginally ahead of the deadline. The operator is owned by Turkcell Holdings, of which Fridman holds 13.2%, Karamehmet holds 13.8%, and Swedish group Telia owns 37%.
In April this year, Cukurova began an arbitration process in an attempt to acquire Alfa’s stake in Turkcell Holdings, commencing legal action in the London Court of Arbitration. Cukurova claimed that Alfa contravened its partner agreement by taking advantage of infighting between Telia and Turkcell.
In July, the court threw out the claims against Fridman and ordered Cukurova to either pay $2.7 billion to acquire Alfa’s shares in Turkcell, or sell their stake to the group for $2.8 billion. It then extended the deadline for the resolution of the ownership dispute from September into November.
The agreement between Alfa and VTB suggests the Fridman could be looking to buy out Karamehmet and Cukurova. VTB issued a statement saying that it believes any investment “could help Turkcell generate higher foreign exchange earnings, and further enhance its investment potential”.