Creditor banks are to establish a “Special Purpose Vehicle” to take over Türk Telekom, Turkey’s privatized telecommunications company, due to billions of dollars of unpaid debts in the course of the Turkish currency and debt crisis.
Having the 55 per cent of Türk Telekom shares, the Dubai-based Oger Telecom received some credits, around $ 4,75 billion, in order to readjust its debts in 2013 in return for its shares. Oger Telecom could not pay its credit debts since September 2016, resulting in an obstruction in negotiations with the banks and creditors.
The free fall of the Turkish lira against foreign currencies led to a challenge in the payment of US dollar-based credits since the share received from Türk Telekom’s revenues decreased.
The Turkish government, which holds 30 per cent of Türk Telekom shares, also supports the establishment of a “Special Purpose Vehicle”. These entities are legal vehicles that are often used by companies to isolate such firms from financial risks.
Among the local and foreign banks providing credits to Oger Telecom, Akbank’s receivable debt is $1.7 billion while Garanti Banks’s is $1 billion and İş Bank’s is $500 million. BNP Paripas and Deutsche Bank are also among foreign creditors. International lenders are forming a separate holding company for tax reasons that will hold a stake in the SPV, Bloomberg reported.
