Turkcell Iletisim Hizmetleri AS signed agreements with the advisers on Monday, the people said, asking not to be identified because the information is confidential. TeliaSonera owns 38 percent of Istanbul-based Turkcell, whose other shareholders are Russian billionaire Mikhail Fridman’s Alfa Group and Cukurova Holding AS of Turkey.

Turkcell is looking to expand after the resolution of a decade-long boardroom deadlock among the three major shareholders that hobbled decision making and blocked dividend payments between 2010 and 2014. The impasse ended last year when regulators intervened and appointed new board members, while Cukurova’s repayment of a $1.6 billion loan to Alfa in 2014 also eased tensions among the owners.

The Turkish mobile operator has a 41.45 percent stake in Rotterdam-based Fintur, with TeliaSonera holding the rest. Turkcell intends to gain control of Fintur, which runs mobile businesses in Kazakhstan, Azerbaijan, Moldova and Georgia, "in 2016 if all the negotiations go well,” Chief Executive Officer Kaan Terzioglu told reporters Tuesday in Istanbul.

While Terzioglu confirmed that Turkcell has picked two advisers for the transaction, he declined to name them. A spokeswoman for Citigroup’s Turkish unit declined to comment. HSBC didn’t immediately respond to requests for comment.

Sales Target

Turkcell plans to make acquisitions in nearby markets, with a focus on North Africa, the Balkans and Central Asia, to accelerate growth, Terzioglu said. The company is interested in assets that resemble its business culture and whose earnings are strong enough to result in growth in the target markets, he said. Turkcell advanced 2.1 percent to 11.95 liras by 4:19 pm in Istanbul, the biggest intraday gain since Nov. 4.

Fintur had 17.6 million users in the four countries it operates as of Sept. 30, almost half as many customers as Turkcell has in Turkey. Its revenue fell to $346 million in the third quarter from $479 million year earlier, according to Turkcell’s website.

Terzioglu said his company has a three-year plan for expansion until the end of 2018, including becoming the largest mobile operator by sales in Turkey. It aims to overtake Turk Telekomunikasyon AS, achieving "slightly less than 40 percent” of all sales generated by the three competitors in the local industry, which include Vodafone Group Plc.

A transition to faster 4.5G mobile data services starting in April should boost sales Terzioglu said. At an August auction, Turkcell paid 1.62 billion euros ($1.73 billion) to win the largest share of the spectrum on sale. Turkcell signed contracts with Aselsan Elektronik Sanayi ve Ticaret AS, Huawei Technologies Co. of China and Ericsson to obtain equipment for the new network, he said.

 

(Bloomberg)