Russians in Turk mobile phone deal

ANKARA – Russia’s Alfa Group will finance its $3.3 billion deal with Turkey’s debt-laden Cukurova Group through its own resources, Alfa’s owner, Russian magnate Mikhail Fridman, said yesterday. The financing deal consists of a $1.707 billion loan and $1.593 billion in six-year bonds convertible into shares which would enable the group’s Alfa Telecom to take a 13.22 percent stake in Cukurova’s mobile phone arm Turkcell. Fridman was speaking in the Turkish capital before talks with the country’s State Minister Kursad Tuzmen, who is in charge of foreign trade. «One positive side of this cooperation is that it will open the way for Cukurova to pay its debts to the state,» Fridman told reporters. Cukurova says it will use the financing from Alfa to repay its debts to state banking regulators after the 2002 collapse of its Pamukbank, and to buy a Turkcell stake held by leading bank Yapi Kredi, which Cukurova is selling to a Turkish-Italian venture. «The most important thing is that with our cooperation, control of Turkcell will remain in the hands of a Turkish company,» Fridman said. Legal disputes The Alfa deal was reached last month despite a legal challenge from Nordic telecoms firm TeliaSonera, which holds 37 percent of Turkcell and had agreed in March to acquire another 27 percent, a deal Cukurova has since abandoned. Alfa’s interest in Turkey has been linked with an ownership dispute between Alfa and TeliaSonera in Russia, where they are shareholders in the third-largest mobile firm, MegaFon. But Fridman shrugged off this assertion. «This is just a viewpoint. We see this cooperation as very advantageous in itself,» he said. In comments seen as signaling that the Turkish government looked favorably on the deal, Tuzmen said the investment was very important for both Russia and Turkey. «Positive developments have increased interest in Turkey. We see the investment decision of Alfa Group as a sign of stability,» Tuzmen said. When the deal with Alfa was announced last month, Sweden’s industry minister said the TeliaSonera dispute was a test of Turkey’s economic and legal system. Turkcell is the only Turkish firm listed on the New York Stock Exchange and is the mobile phone market leader, with 23 million subscribers.

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