21/11/2017 17:59 AST
Qatari phone carrier Ooredoo QSC decided to bid for the insolvent owner of Turkey's biggest telecommunications company to rival an offer from Saudi Telecom Co., three people with knowledge of the matter said.
Ooredoo will seek to acquire Ojer Telekomunikasyon AS, or Otas, a special purpose vehicle that owns 55 percent of Turk Telekomunikasyon AS, said the people, who asked not to be identified because the matter is private. The Saudi proposal remains on the table, they said.
A purchase by Ooredoo would extend the Doha-based company's record of expanding to serve about 150 million customers from Algeria to Myanmar, largely through acquisitions. The plan by Saudi Telecom, which owns 35 percent of Otas's parent, Oger Telecom, involves buying the company via a $750 million cash injection and committing to restructure a further $4 billion of debt.
In Turkey's largest syndicated loan default, Otas missed three payments since September 2016 on $4.75-billion it borrowed from 29 local and international banks in 2013. Creditors including Akbank TAS, Turkiye Garanti Bankasi AS and Turkiye Is Bankasi AS hired Lazard Ltd. and Raiffeisen Investment AG to help with negotiations over the loan, according to people familiar with the plan. Other parties to the talks are the Turkish Treasury, which has a 25 percent stake in Turk Telekom, and Saudi Telecom.
Ooredoo fell as much as 8.2 percent and was down 6.5 percent as of 3:51 p.m. in Doha. Akbank rose 0.6 percent to 9.14 liras, while Garanti Bankasi gained 0.3 percent to 9.69 liras in Istanbul. Turk Telekom was trading down 0.5 percent at 5.65 liras.
The pursuit of the Turkish asset comes a standoff between Qatar and its neighboring Gulf states shows no sign of letting up. The United Arab Emirates, Saudi Arabia, Bahrain and Egypt cut diplomatic relations and closed transport routes with Qatar in June, accusing the nation of funding terrorism, a charge it denies.
Saudi Upheaval
At the same time, Saudi Arabia is going through major upheaval following the arrest of wealthy princes, officials and businessmen in the kingdom earlier this month.
Otas's creditors may seek further proposals, according to the people. Representatives of Otas and Ooredoo declined to comment.
The Turkish Treasury gave Otas 60 days from early August to find a solution to the debt situation and warned that it might exercise its right under a shareholders agreement to take control of Turk Telekom's management, people familiar with the matter have said.
Akbank is owed about $1.5 billion under the facility, Garanti Bankasi around $1 billion and Is Bankasi about $500 million, according to public filings.
Bloomberg
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