Banks to lend up to $4 billion loan for Turk Telekom stake, say sources: Reuters

Creditor banks will extend a loan of up to $4 billion to the special purpose vehicle (SPV) they are creating to take over 55 percent of Turk Telekom as part of debt restructuring talks, two sources close to the matter told Reuters.

The majority stake will be used as collateral for the loan, according to the sources, who asked not to be named because the information is confidential.

“A $3 billion to $4 billion loan will be extended to this special purpose vehicle and banks will take the 55 percent stake as collateral,” one of the sources said, adding that the plan is to complete the process in the third quarter.

The precise size of the loan will be determined by a valuation report that the banks are conducting on the company, the sources said.

The 55 percent stake is owned by Dubai-based Oger Telecom, which has failed to keep up payments on a $4.75 billion loan it took out to acquire the stake in the Turkish fixed-line operator.

Akbank (AKBNK.IS), Garanti (GARAN.IS) and Isbank (ISCTR.IS) have applied to Turkey’s competition authority to take over 55 percent of Turk Telekom (TTKOM.IS) via an SPV.

The three banks declined to comment.

Among Oger Telecom’s creditor banks, Akbank lent it $1.7 billion, Garanti lent about $1 billion and Isbank about $500 million, according to the banks’ first-quarter financial statements.

The ultimate goal is to be able to sell the stake, the sources said.

The lenders conducted talks for a stake sale with potential buyers Saudi Telecom Company (7010.SE) and Qatar-based Ooredoo (ORDS.QA) but failed to reach agreement.