Telia Company has agreed to sell its 47.1% stake in Turkcell Holding to the state-owned Turkey Wealth Fund for $530 million.
The transaction also includes, subject to closing, a full and global settlement of all shareholder disputes and litigations connected to Turkcell and Turkcell Holding.
Commenting on the transaction, Allison Kirkby, president and CEO of Telia Company, said: “Today we announce the final piece of the Turkish exit puzzle – the divestment of Telia Company’s stake in Turkcell Holding. Over the past few years, our focus has been our core Nordic and Baltic markets. Through this divestment, we unwind a long-lasting legal deadlock; we reduce risk, improve leverage and increase liquidity which will generate better shareholder returns in our core markets.
“Turkcell has grown into a strong company which has generated substantial returns for its owners”.
In a statement Telia Company notes that since the divestment of its 14% direct ownership in 2017, it has not been a direct owner of Turkcell Iletisim Hizmetleri. Fintur, which was jointly owned with Turkcell, was dissolved in 2019, further limiting Telia’s direct involvement with Turkcell.
It adds that Turkcell Holding is a privately held holding company, directly and indirectly owned by Cukurova, LetterOne and Telia Company. Its only operation is the ownership of 51% in Turkcell. The governance of Turkcell Holding has been challenging. Disagreements between the shareholders have caused difficulties in the corporate governance of Turkcell from time to time. Today’s agreement includes, subject to closing, a full and global settlement of the disputes and litigations in Turkcell and Turkcell Holding, dating back to 2005.
Given that Telia Company’s ownership in Turkcell Holding has a booked value of SEK8 billion and it expects to receive approximately SEK5 billion from the sale, it will incur a loss of SEK3 billion. This will be booked for Q2 2020. Accumulated foreign exchange losses, due to the depreciation of the Turkish lira versus the Swedish crown, currently amount to around SEK17 billion. However, this will have no impact on equity or cash flow.
Telia Company expects to close the transaction during the second half of this year.
