Turkey's Cukurova Said to Mull Rejigging $1.6 Billion Loan

(Bloomberg) -- Turkey’s Cukurova Holding is considering whether to ask Ziraat Bank to restructure a dollar-denominated loan it took out from the state-owned lender five years ago, according to people familiar with the plans.

Cukurova has so far only made interest payments on the $1.6 billion loan and will seek a meeting with the bank before a pre-scheduled payment in July, should it decide to ask for the debt to be reorganized, the people said, asking not to be identified because the deliberations are private. The 10-year loan had a three-year grace period.

The holding company used the money in 2014 to reclaim a 13.8 percent stake in Turkcell Iletisim Hizmetleri AS, which it had pledged to Russian billionaire Mikhail Fridman’s LetterOne Investments, formerly known as Alfa Group, under a debt deal nine years earlier.

If it opts for a restructuring, Cukurova will join several other Turkish companies that have sought to reorganize debt denominated in foreign currencies after last year’s crash in the lira made it difficult to repay the loans.

Representatives at Cukurova and Turkcell declined to comment when reached by phone. A Ziraat Bank spokesman wasn’t immediately available for comment. The lender’s chief executive officer, Huseyin Aydin, was recently appointed to Turkcell’s board.

Shareholder Feud

Turkcell has been hampered by a long-running battle between its shareholders -- Cukurova, owned by Turkish businessman and one of Turkcell’s founders Mehmet Emin Karamehmet, Fridman and Stockholm-based Telia Co. AB.

Fridman’s LetterOne indirectly holds 13.2 percent of Turkey’s largest wireless carrier, while Karamehmet’s Cukurova indirectly holds a 13.8 percent stake. Telia is Turkcell’s biggest shareholder with 24 percent indirectly as part of Turkcell’s labyrinthine structure.

For years, the bitter feud between the stakeholders halted dividend payouts as the board was unable to call investor meetings.

To contact the reporters on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net;Kerim Karakaya in Istanbul at kkarakaya2@bloomberg.net;Asli Kandemir in Istanbul at akandemir@bloomberg.net

To contact the editors responsible for this story: Onur Ant at oant@bloomberg.net, ;Alaa Shahine at asalha@bloomberg.net, ;Benjamin Harvey at bharvey11@bloomberg.net, Vernon Wessels, Liezel Hill

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