Negotiations for the takeover began on December 17 as confirmed by a statement released by the Turkish Wealth Fund website.
In 2013, OTAS, a unit of the Dubai-based Oger Telecom had taken out a $4.75 billion loan to acquire 55% of Turk Telekom but failed to keep up with payments.
The loan was Turkey’s largest at the time and in 2018, creditor banks set up a special purpose vehicle for the shares of the company that were given as collateral for the loan.
The special purpose vehicle, called Levent Yapilandirma Yonetimi (LYY) was set up by three major Turkish banks as it tries to rehabilitate the company.
Though, following the talks the Wealth Fund’s move to acquire a stake in the company appears increasingly likely to succeed given that the firm’s license expires in 2026.
The wealth fund was set up in 2016 by the Turkish government to increase the value of the country’s strategic assets and provide resources for investment.
Turk Telekom was initially was sold off for $6.55 billion in 2005 and it was reported in October that the Turkey Wealth Fund, which is chaired by Turkish President Recep Erdogan was interested in a deal as he sees telecommunications as a strategic sector in the country.
When OTAS took over the controlling stake in 2005, the Turkish treasury owned the remaining share and in 2008, a 15% stake from the treasury’s share was offered to the public.
In 2017, the treasury transferred another 6.68% to the Wealth Fund.
