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Turkey’s Wealth Fund Considers Selling Turkcell Stake
Turkey's sovereign wealth fund is contemplating the potential sale of its 26.2% stake in Turkcell Iletisim Hizmetleri AS, the nation's largest telecommunications operator. Sources familiar with the discussions indicate that while informal negotiations with potential buyers have taken place, a definitive decision from the board of the Turkey Wealth Fund (TWF) remains pending.
Internal Debates and Presidential Approval
Opinions within the TWF are divided; some members believe that Turkcell is a strategic asset too valuable to part with. Ultimately, the final decision is expected to be made by President Recep Tayyip Erdogan, who oversees the fund’s board. Prospective buyers from the Arabian Peninsula and Azerbaijan have shown interest in acquiring a stake in the company.
Advisory Consultations and Market Reactions
The fund has initiated contact with at least one investment bank to potentially advise on the sale, although no formal mandate has been given. As speculation about the possible sale emerged, Turkcell’s shares surged, climbing as much as 5.4% to a peak of 111.7 liras, marking the highest level since the company's initial public offering in 2000. Since acquiring the stake in 2020, TWF has seen the stock's value increase by over 50% in dollar terms, attributing to Turkcell a market capitalization of approximately $7.3 billion.
Stake Composition and Market Presence
LetterOne Investment Holdings, associated with Russian billionaire Mikhail Fridman, holds a 19.8% stake in Turkcell, while the remaining shares are publicly traded on Borsa Istanbul and the New York Stock Exchange as depository receipts. The acquisition of the stake by TWF positioned it as Turkcell’s largest shareholder and granted it the authority to appoint five out of nine board members.
Competitive Landscape
Turkcell faces competition domestically from Turk Telekomunikasyon AS and Vodafone Group Plc. The TWF's role transcends mere ownership; established in 2016, the fund is tasked with spearheading substantial investments considered beyond the reach of the private sector.
Broader Portfolio and Strategic Assets
The fund's portfolio includes a variety of significant assets transferred from Turkey’s Treasury, such as stakes in state lenders Turkiye Halk Bankasi AS and TC Ziraat Bankasi AS. Additionally, it holds stakes in Turkish Airlines and the local stock exchange.
This developing situation underscores the potential reallocation of valuable assets within Turkey's sovereign wealth fund as it balances between strategic value and market opportunities.
