Turkey Wealth Fund acquires controlling stake in Turkcell GSM operator

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The Turkey Wealth Fund (TWF) has announced that it has agreed to acquire a controlling stake in the country's leading GSM operator, Turkcell.

By acquiring 26.2 percent of the shares of the firm, "TWF becomes the largest shareholder in Turkcell and gains effective control over the board of directors," it said in a press release.

TWF will be able to appoint five of the total nine directors of the firm's board via 15 percent privileged shares within its 26.2 percent shareholding, it noted.

The fund entered into a series of transaction agreements with foreign and domestic firms including Telia Company, LetterOne, Çukurova Holding and Ziraat Bank.

At the completion of this transaction,"Telia Company divests its 24.02 percent indirect stake in Turkcell for $530 million and exits the company," it said.

"LetterOne increases its ownership and acquires, via a restructuring of its current interest in Turkcell Holding, a direct minority interest of 24.8 percent in Turkcell."

The Turkcell Holding joint venture will be terminated, with Çukurova Holding exiting its indirect interest in the company.

"Minority shareholder rights are strengthened as 4 of 9 board members can be elected without TWF privilege rights," it underlined.

Shareholders aim to continue the existing dividend policy of the GSM firm.

TWF will take over Turkcell's debt

Zafer Sönmez, the CEO of TWF, that they would also take over the 1.6 billion dollar debt of Turkcell.

"We intend to support Turkcell management in its focus on innovation and their strategic initiatives such as 5G infrastructure while the company continues its pioneering role in product and services innovation," he added.

Turkcell, which has 47 million customers, is an international mobile and fixed telecom firm.

"Turkcell continues to be the only company headquartered in Turkey that is dual listed on Borsa İstanbul and the New York Stock Exchange," added the press release.

Acquiring the stake in the GSM firm was TWF's first international transaction.

"The transaction is expected to close during the second half of 2020, subject to obtaining regulatory clearances and the approval of the revised Articles of Association by the shareholders in Turkcell's Annual General Assembly Meeting," the press release said.

TWF, founded in 2016, holds all or part of the shares of several companies including flag carrier Turkish Airlines, telecommunications giant Turk Telekom, state lenders Ziraat Bankasi and Halkbank, oil company Turkish Petroleum and stock market Borsa Istanbul.