Turkey Wealth Fund acquires majority stake in Türk Telekom

ISTANBUL

Turkey Wealth Fund has reached an agreement with LYY Telekomünikasyon Corporation, a joint venture created by creditor banks, to acquire 55% of Türk Telekom shares for $1.65 billion.

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“This acquisition demonstrates TWF’s confidence not only in the attractive long-term prospects of the Turkish telecommunications industry, but also in the sustainability of Türk Telekom’s strong market position, brand value, asset base, exceptional human resources and diversified business model resulting in strong financial and operational performance,” the sovereign wealth fund said in a March 10 statement.

In a statement, TWF CEO Arda Ermut said, “As TWF, we are focused on creating value in line with our mission as an asset-based development fund. Our main objectives are to maximize the value of our assets and to support the emergence of leading regional and global companies in Turkey. Türk Telekom is such a company that aligns our strategies and goals with its potential and brand value. »

“As TWF, we aspire to add further value to the telecommunications sector by contributing to the process of digitization while further strengthening our country’s technological infrastructure,” he added.

Türk Telekom said in a statement to the Public Disclosure Platform (KAP) that “the share transfer process will follow the necessary legal approvals and the fulfillment of the preconditions listed in the share transfer agreement.”

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The fund’s portfolio includes 28 companies in seven sectors, two licenses and 46 real estate properties. State lenders Ziraat Bank, HalkBank and VakıfBank, the country’s stock exchange Borsa Istanbul, Turkish Airlines, GSM giants Turkcell and Türk Telekom and natural gas company Botaş are among them.

TWF also owns the majority of shares in the Istanbul Finance Center project. The construction of the IFC in the metropolis and the commercial center of the country is expected to be completed this year.

Türk Telekom, a major telecommunications company, had 14.1 million broadband customers at the end of September 2021. The number of fiber subscribers jumped 67% to 8.8 million in the first nine months of the last year. Mobile customers, meanwhile, stood at 23.9 million.

Türk Telekom accumulated almost $2.5 billion in revenue during the period January-September 2021, showing an annual increase of 18%.

The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) reached L12.1 billion ($1.2 billion) in the same period, while its EBITDA margin was 49. 6%.

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Türk Telekom’s net profits over the same period reached $443.5 million. “Our 353,000 kilometer long fiber network covering all of Turkey is a powerful lever for future technologies,” Türk Telekom CEO Ümit Önal said recently.

Türk Telekom and Chinese giant Huawei have signed a memorandum of understanding to collaborate on the development of the fifth generation (5G) technology standard for cellular broadband networks in Turkey.

OTAŞ, a Dubai-based unit of Oger Telecom, took out a $4.75 billion loan in 2013 to acquire 55% of Türk Telekom but failed to repay.

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The creditor banks, including Akbank, Garanti BBVA and İşbank, in 2018 set up a special purpose vehicle for Türk Telekom shares which were pledged as collateral for the loan.

Turk Telekom,

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