By Yeliz Candemir
ISTANBUL-- Turkcell Iletisim Hizmetleri AS's controlling
stakeholder Cukurova Holding AS said late Wednesday that it has
taken legal action to consolidate its hold over Turkey's biggest
mobile-phone operator, suing to buy shares held by Russia's Alfa
Group in the latest twist to a yearslong ownership fight.
Turkish billionaire Mehmet Emin Karamehmet's Cukurova said in a
statement that it had applied to the Court of International
Arbitration in London, claiming Alfa had breached a shareholder
agreement in their joint holding company, an investor in Turkcell.
The violations provide Cukurova with the right to buy Alfa's 49%
stake in the holding company, the Istanbul-based company said,
declining to provide more details, citing the arbitration's
confidentiality.
The push by Mr. Karamehmet signals more turmoil for Turkcell,
where decision-making had been stalled since 2011 amid legal
battles to gain control of the company among its three top
shareholders--Cukurova, Russian oligarch Mikhail Fridman's Alfa
Group and Sweden's TeliaSonera AB.
While court orders in 2013 had largely settled ownership claims
in Cukurova's favor, albeit at a heavy financial cost, the Turkish
stakeholder and its Russian partner have continued to spar over
each other's shares.
Turkcell shares dropped by as much as 0.75% on Thursday morning,
recovering some of their earlier losses in afternoon trading, while
the benchmark BIST-100 Stock Index rose by 0.6%.
Analysts said the new arbitration was unlikely to have a
significant impact on Turkcell's stock, especially because the case
is likely to take a long time.
"A court ruling in favor of Cukurova would pave the way for the
full resolution of the shareholder's conflict," said Garanti
Securities, an Istanbul-based brokerage.
Cukurova's move came after Alfa last month offered $2.8 billion
to buy a 13.8% stake in Turkcell from the Istanbul-based company.
The Turkish company had 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.
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 what is seen as a strategic
national asset.
Turkcell last week held its first shareholder meeting since 2011
and shareholders agreed on long-awaited dividend payment. The
meeting provided investors with a 3.9 billion lira ($1.5 billion)
payout, equivalent to 42.5% of Turkcell's profits between 2010 and
2014.
While the rare compromise among leading shareholders provided a
boon to investors, it did little to end the ownership struggle. If
Turkcell had failed to convene the general assembly last week,
Turkish regulators at the Capital Markets Board would also 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.
Write to Yeliz Candemir at yeliz.candemir@wsj.com
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