By Yeliz Candemir
ISTANBUL-- Turkcell Iletisim Hizmetleri AS on Thursday held its
first shareholder meeting since 2011, with an imminent threat of
regulatory takeover forcing major stakeholders to cooperate even as
they continue to fight to control Turkey's biggest mobile-phone
operator.
In a statement, Turkcell said shareholders approved a dividend
policy and the distribution of retroactive dividends for fiscal
years 2010 through 2014. "The distribution [of a dividend] to
shareholders [will be], by the latest, April 6, 2015," the company
said.
The general assembly, gathering in Istanbul, not only marks a
step toward normalization of long-strained ties among three major
shareholders, but also provides investors with a 3.9 billion lira
($1.5 billion) dividend, the first payout since 2011 and equivalent
to 42.5% of Turkcell's profits between 2010 and 2014.
After nearly a decade of legal battles and boardroom maneuvers
that crippled decision-making at Turkcell, Cukurova Holding AS of
Turkey, Russian oligarch Mikhail Fridman's Alfa Group and Sweden's
TeliaSonera AB struck a rare compromise, providing a boon to
investors but doing little to end their ownership struggle. If they
had failed to convene the general assembly by Tuesday, Turkish
regulators at the Capital Markets Board would have been able to
seize power in the name of all shareholders, with the majority
owners effectively relinquishing their authority and ability to set
the dividend.
"Agreeing upon dividends does not warrant a resolution of
dispute in other major issues. We still think that this dividend
move is to avoid Capital Markets Board intervention," said
Istanbul-based brokerage Oyak Securities. "The board deadlock
remains."
Turkcell shares Thursday closed 1.82% lower, at 13.45 lira, amid
a 1.4% lower overall Istanbul market. The shares had rallied by as
much as 6.5% on Wednesday, when Cukurova, Alfa and TeliaSonera each
said they had agreed on the dividend payment.
The moves come as the company seeks to reassure investors with
new leadership, picking Kaan Terzioglu to take over as chief
executive officer April 1.
There is more turbulence ahead, however, as last week, Alfa
offered $2.8 billion to buy a 13.8% stake in Turkcell from
Cukurova, owned by Turkish billionaire Mehmet Emin Karamehmet.
Cukurova secured those shares, and control of Turkcell, last year
by paying the Russian conglomerate $1.6 billion to reclaim the same
stake Alfa now seeks to buy. Mr. Karamehmet had relinquished the
shares to Alfa when Cukurova defaulted on a loan from the Russian
firm, but a U.K. court said January 2013 that the Turkish firm had
the right to regain the stake by paying off its debts, plus
interest.
While Alfa seeks to gain control of Turkcell by buying the
stocks it almost clinched because of a debt default, Turkish
regulators have repeatedly warned that ownership changes are
subject to their approval in a sign that the government is unlikely
to allow a Russian takeover of a strategic national asset.
In 2013, Turkey's Capital Markets Board appointed five people to
Turkcell's seven member board, signaling the government's intention
to exert influence over the company through its regulatory
watchdog. Most recently, the government increased its leverage over
Turkcell when Cukurova got a loan from state-owned TC Ziraat
Bankasi AS to pay its debt to Alfa in exchange for the controlling
stake in the phone operator. The bank holds the 13.8% stake Alfa
wants to buy as collateral to its loan to Mr. Karamehmet.
Write to Yeliz Candemir at yeliz.candemir@wsj.com
Access Investor Kit for TeliaSonera AB
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=SE0000667925
Access Investor Kit for TURKCELL Iletisim Hizmetleri AS
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=TRATCELL91M1
Access Investor Kit for TURKCELL Iletisim Hizmetleri AS
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9001112047
Subscribe to WSJ: http://online.wsj.com?mod=djnwires