Lebanese owners begin talks to sell shares as their company in Turkey fails to pay due installment
TURK TELEKOM is among the largest establishments in Turkey almost a monopole in the Telecommunication sector in the country and it was bought by the famous Hariri family of Lebanon in 2005 at the time of privatization campaign of the Ak Parti Government. Since then the family has been in charge of the huge operation in Turkey and indeed the Turkish Government has received severe criticism for having made the huge establishment (state owned at the time) available to the family for a package far below its worth.
It is now reported in some media organs that the family has begun talks to sell a stake in their Dubai-based telecommunications unit as they seek to avoid default on a $4.75 billion loan, according to two people with direct knowledge of the matter.
The Hariris are reaching out to potential buyers after a company they own in Turkey failed to pay an installment of $290 million due in September and was given an extension until the end of October to resolve the matter, the people said, asking not to be named because the discussions are confidential. The loan is linked to the family’s purchase in 2005 of a majority stake in Turk Telekomunikasyon AS, Turkey’s biggest phone company.
The family has requested an additional extension to the end of November to make a payment as they seek to raise funds via a stake sale, the people said. Three bidders including a telecoms operator not based in Turkey and a company from Qatar, are currently in talks to buy part of Oger Telecom Ltd., which the Hariris own along with Saudi Telecom Co., one of the people said.
The troubled loan was the biggest syndication in Turkish history when it was issued in 2013, with 29 participants that included all of the country’s largest lenders, as well as international banks including Citigroup Inc., JPMorgan Chase & Co. and Deutsche Bank AG. Turkey’s Akbank TAS has about $1.5 billion in exposure to the loan, while Turkiye Garanti Bankasi AS lent about $1 billion, according to one of the people. Akbank and Garanti were among the six book-runners and mandated lead arrangers on the loan, according to a statement from the borrower.