“Sweden’s Telia will sell 14% of Turkcell for $515 million

– Sonera Holding B. V., a subsidiary of Swedish telecommunication company Telia holding Company, has finished accepting applications for the purchase of shares of Turkcell, at the end of the collected offers, the price per share was 11.6 Turkish liras.

As stated in the Telia, just for 153.5 million shares of the Turkish company Sonera Holding get of 1.78 billion Turkish Lira, or about $515 million at the current exchange rate of the Lira.

After the transaction, the share of the Swedish company in Turkcell will be reduced to 24% from 38%. This shares the company will own indirectly through the capital of Turkcell Holding.

“Selling a live package in Turkcell to the strategy of our company, involving focusing on the business in the Nordic and Baltic countries. After completing the transaction, we will continue to be major shareholders of Turkcell, therefore, make every effort to exit the joint conflict and restoration of normal corporate governance in Turkcell”, is quoted in a press release the words of President and CEO of Telia Dennelind Johan (Johan Dennelind).

The bookrunners of the offering were Merrill Lynch International (BofA Merrill Lynch), Citigroup Global Markets Limited (Citi) and UBS Limited.

Telia expects a decrease in the ratio of debt/EBITDA after transaction is completed by 0.14 (for the first half of the index is 1.36).

In may 2017, Telia announced the completion of pricing for the package of 155 million shares of Turkcell. Then the price of one securities made up of 11.45 Turkish Lira, the cost of the entire package – 1,775 billion Turkish liras ($513 million).

Earlier it was reported that Telia Company, which owns 25,71% in the Russian operator “MegaFon” also considering selling part of the stake in the company.

Turkcell 51% owned by Turkcell Holding A. S. She, in turn, of 52.91% owned by Cukurova Telecom Holdings Ltd. (CTH), by 47.09% Telia. While Alfa Telecom Turkey (structure “the alpha-groups”) owns 49% of CTH. Currently (until the completion of the transaction Telia), including shares in Turkcell Holding and in direct possession of Telia owns 38% of the Turkish operator, Cukurova from 26.98%, alpha of 13.2%.

For more than 10 years “Alfa-group” is seeking from Cukurova receiving 13.2% of Turkcell’s shares. This package Cukurova had provided as collateral for the loan of $1.7 billion, taken from “alpha-group” in 2005 and not repaid in a timely manner. In 2014, Cukurova was able to raise funds to repay the loan, but “the alpha-groups” has continued to make the issuance of the shares in Turkcell instead of money, the repayment period which passed. The company LetterOne (L1), the successor to “alpha groups”, some times referred to Cukurova with the offer to purchase shares. However, the Turkish holding has rejected the offer and, for its part, has submitted to the London international arbitration claim to L1 with the requirement to sell its stake in Turkcell. The court rejected the claim.

The joint-stock conflict blocks corporate processes in Turkcell, in particular, owners have traditionally been unable to agree on the payment of dividends and their size. The Board of Directors of Turkcell still representatives of both parties – L1 and Cukurova.

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