Turkcell, Genel shares blocked by Ziraat as part of loan deal

Çukurova Holding has said it paid Russia’s Alfa Group $1.6 billion to recover a disputed stake in Turkcell, taking a major step toward regaining control of Turkey’s biggest mobile phone operator after a seven-year battle.

Istanbul-based Çukurova signed a loan agreement with state-run lender Ziraat Bank in connection with the Alfa Group payment, the company said in a statement to the Istanbul Stock Exchange.

The company has announced Ziraat also imposed a block on the group’s 24-percent share in energy company Genel. A source at Altimo, the telecoms investment arm of Russia’s Alfa Group, said last week that Çukurova would secure the financing from Ziraat Bank and that a payment was expected on July 31.

“Our Group has signed a loan agreement with Ziraat Bank in relation to recovering the Turkcell shares held by Alfa Group and by using loans from the agreement, about $1.6 billion owed to Alfa Group as per the Privy Council decision has been paid to Alfa Group’s bank account,” Çukurova said.

“Therefore, the block in favor of Alfa Group has been removed and a block, on the same shares, have been restored in favour of Ziraat Bank,” it said in the statement.

A British court that has been arbitrating in the dispute said last week that Çukurova and Alfa had agreed terms under which Çukurova could finance the recovery of the stake.

Altimo appropriated the 13.8 percent stake, a controlling position due to Turkcell’s complex ownership structure, when Çukurova defaulted on a $1.35 billion loan.

The Turkish government has been keen for Turkcell, the country’s biggest mobile phone operator, to remain in Turkish hands and for Çukurova to secure...