Turkey Wealth Fund (TWF) has signed a Share Purchase Agreement (SPA) to acquire a 55% stake in Turkey’s dominant fixed network operator Turk Telekom (TT) from LYY Telekomunikasyon (LYY) for USD1.65 billion. Additionally, corresponding to LYY’s 55%, an amount out of the dividends to be distributed by TT’s General Assembly based on the audited consolidated financial statements of 2021 will be paid to LYY. Sovereign fund TWF’s press release noted that the closing of the transaction is subject to the fulfilment of a number of precedents set out in the SPA, including approval of relevant regulatory authorities. The deal wraps up negotiations initiated on 17 December 2021.
According to TeleGeography’s GlobalComms Database, LYY is a Special Purpose Vehicle (SPV) formed by a group of 29 banks led by Akbank, Turkiye Garanti Bankasi (Garanti Bank) and Turkiye Is Bankasi (Isbank) following a debt restructuring deal that was completed on 22 December 2018. If the latest deal is completed, TWF-backed operators will dominate all Turkish telecoms sectors, as the state fund already owns a controlling stake in Turkcell – Turkey’s mobile market leader and second largest fixed broadband provider behind TT – as well as 100% of Turksat, the third-placed fixed broadband operator. TT’s cellular subsidiary TT Mobil competes very closely for the title of second largest mobile operator against Vodafone Turkey.
The Turkish Treasury holds a 25% TT stake plus special veto power via one ‘golden share’, with 5% currently allocated to TWF and the remaining 15% in free float (with TWF’s current total TT stake reported as 6.7% including some free float shares it holds).