Turkish Sovereign Wealth Fund Weighing Stake Sale in Turkcell - Bloomberg

Turkish Sovereign Wealth Fund Weighing Stake Sale in Turkcell - Bloomberg

Turkey’s sovereign wealth fund is weighing whether to sell its 26.2% stake in Turkcell Iletisim Hizmetleri AS, the country’s biggest telecommunications operator, according to people familiar with the matter.

The board of Turkey Wealth Fund, or TWF, has yet to make a formal decision, the people said, asking not to be named because the talks are private. While informal discussions with potential buyers have taken place, some within the sovereign wealth fund are opposed to a sale because they consider the company a strategic asset, one of the people said. A final decision will likely be made by President Recep Tayyip Erdogan, who leads the fund’s board.

Investors from the Arabian Peninsula and Azerbaijan have expressed interest in purchasing a stake in the company. The fund has approached at least one investment bank about advising on a potential sale but has not issued a formal mandate, some of the people said. TWF and Turkcell declined to comment.

Turkcell shares rose as much as 5.4% to 111.7 liras after the report, the highest level since the company’s IPO in 2000. The stock has risen more than 50% in dollar terms since TWF acquired the stake in 2020, giving the company a $7.3 billion market capitalization.

LetterOne Investment Holdings, an investment firm founded by the Russian billionaire Mikhail Fridman, has a 19.8% stake, and the rest of the shares are traded on Borsa Istanbul and as depository receipts on the New York Stock Exchange.

When TWF bought the stake, it became both the largest shareholder and gained the right to appoint five of the nine members on Turkcell’s board of directors.

Turkcell’s main competitors domestically are Turk Telekomunikasyon AS and Vodafone Group Plc.

The Turkish government established the sovereign fund in 2016 and mandated it to play a major role in making investments deemed too big for the private sector. It holds a number of assets taken over from Turkey’s Treasury, including stakes in state lenders Turkiye Halk Bankasi AS and TC Ziraat Bankasi AS. It also owns stakes in Turkish Airlines and the local stock exchange.