15:35 26.09.2016

L1 keen to up stake in Turkcell is corporate governance improves - Fridman

2 min read
L1 keen to up stake in Turkcell is corporate governance improves - Fridman

LetterOne (L1), which manages the assets of the Alfa-Group, owned by Mikhail Fridman and his business associates, is still interested in increasing his stake in Turkish cellular provider Turkcell as it sees good opportunities for synergy between Turkcell and VimpelCom, Fridman, who chairs the supervisory board of Alfa-Group, told reporters in Kyiv.

"Turkcell is on the whole a splendid company - as they say there's a good appetite for Turkcell - but only on the condition that this is a normal company, run by its shareholders and not the state," Fridman said.

Alfa's effective stale in Turkcell is currently 13.2%. The Alfa-Group's Alfa Telecom Turkey owns 49% of Mehmet Karamehmet's Cukurova Telecom Holdings (CTH), which has a 52.91% stake in Turkcell Holding A.S. The latter owns 51% of Turkcell.

Cukurova has until November 18 to decide whether to buy 13.2% of Turkcell or sell its own 13.8% stake to L1 for $2.8 billion. If Cukurova misses the deadline for a decision to buy, this will be interpreted as a decision to sell in favor of L1, according to London arbitration court materials.

"At Turkcell we intend to follow the arbitration's decision to the letter - either they buy us out or they sell us their stake. We would be happy with either, and we hope they will follow this ruling closely as well," Fridman said.

He said that L1 did not currently have any board room influence at Turkcell. "Despite the fact there's not one share that belongs to the state, all decisions are made by government officials," he said.

Fridman said the state was currently deciding whether to buy L1 out or not because Cukurova does not have funds of its own.

The Swedish-Finnish TeliaSonera is also a shareholder in Turkcell, both directly and via a 47.09% stake in Turkcell Holding. TeliaSonera controls 37% of Turkcell shares outright and Cukurova has 26.98%.

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