Feb 25 2018

Government takeover of Türk Telekom possible - Turkish MP

Turkish main opposition party Republican People's Party (CHP) Deputy Chairman Aykut Erdoğdu envisages a government takeover of Türk Telekomünikasyon A.Ş.'s (OTAS) management to resolve Turkey’s largest debt default in the near future.

"Türk Telekom's financial situation is becoming more and more distressed under the management of Oger and AKP. There is strong likelihood that the company balance sheets are doctored to look better than they are," Erdoğdu said.

Türk Telekomünikasyon A.Ş. is owned by Oger Telecom (55 percent), the Turkish Treasury (25 percent) and the Turkish Wealth Fund (6.68 percent), with the remaining 13.32 percent of its shares being publicly traded in Turkey's stock exchange market, Borsa Istanbul.

Majority owner Oger, a unit of Saudi Arabian construction giant Saudi Oger, has missed debt repayments for the last 18 months on it's $6.5 billion debt. In January this year, it was reported that three Turkish banks would begin legal proceedings to take a stake in Turk Telekom after Oger Telecom failed to make three repayments on a $4.75 billion loan.

Türk Telekom that had announced profits of YTL862 million (roughly $320 million) in 2015 published a net loss of YTL724 million (roughly $270million) in 2016 because of its increased debts. In 2017 it was reported that OTAS was laying off staff. It was also reported that the company started renting out the buildings and offices within the company's communication infrastructure.

"Türk Telekom's debt to capital ratio is around 639 percent as of this year. To control the news of this unfortunate situation, and to prevent a public repercussion, OTAS's balance sheet is being doctored," said Erdoğdu.