55% of Türk Telekom sharesWe recently shared with you the information that has been transferred to the Turkey Wealth Fund. owner of shares LYY Telecommunications with Turkey Wealth Fund between December and 10 March 2022 We will share with you the details of the process, which became final with the signing of the signature.
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Unknowns in Türk Telekom sales!
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shiftdelete.netLYY is a Joint Venture Company established for special purposes as a result of the merger of many banks. Since the telecom sector is not the main business focus of banks, after the share transfer in 2018, LYY revealed its intention to sell its 55 percent share of Türk Telekom and authorized a brokerage house as a sales consultant.
However, LYY also underlined that its ownership in Türk Telekom is not strategic and long-term, but temporary. Although LYY was quite successful in fulfilling its responsibilities as the majority shareholder throughout its ownership period, it was widely known to the investor and analyst community that he did not have a strategic vision and long-term perspective in Türk Telekom.
Under these circumstances, there cannot be any conviction that the majority shareholder will proactively put forth the highest effort for Türk Telekom’s investments and future design. This situation changed with the ownership of TVF and it appeared as an important opportunity for Türk Telekom.
Türk Telekom privatization revenue and banks issue:
When Türk Telekom’s privatization cost, public offering and dividend income are also taken into account Between 2006-2021 To the Treasury (including Turkey Wealth Fund) 15.6 billion USD in total brought income.
55 percent of Türk Telekom shares were privatized for a value of 6.55 billion USD, 20 percent of which is cash and the remainder is 5 years maturity. Ojer Telecommunication Inc. paid off the balance of the share sale early and paid off all of its debt; As a result of this transaction, 7.06 billion USD entered the state coffers in the period of 2005-2007.
After the privatization, the state offered 15 percent of its remaining 45 percent shares in Türk Telekom in 2008, this time to the public. With this transaction, an additional 1.7 billion USD in cash inflows into the state’s coffers.
Türk Telekom’s dividend income was paid to the Treasury in proportion to its share, like other shareholders. The Treasury (including the Turkey Wealth Fund) received a total of 6.9 billion USD (the amount paid based on the gross dividend and share sale agreement) from Türk Telekom between 2006-2021.
The loan that OTAŞ has taken from banks and has difficulty in paying is the result of the commercial loan agreement between OTAŞ and banks. The defaulted debt, which has been on the public agenda in the past, is neither Türk Telekom’s nor the Treasury’s debt, it belongs entirely to OTAŞ. The share transfer in 2018 is a transfer transaction that emerged due to the failure of OTAŞ to fulfill the requirements of the agreement made between OTAŞ and the banks. Türk Telekom or the Treasury did not act as a guarantor for this debt, nor did they give any guarantee or surety.
As a result, it is an untrue interpretation to hold the public responsible for the debt that the parties to the issue have given with their own evaluations and that they could not collect, or to talk about public loss. As a result, a revenue of 15.6 billion dollars was obtained through privatization.
What happened in Türk Telekom after privatization?
Türk Telekom went through an important structural transformation after privatization and completed its revenue diversification with its advanced technological infrastructure. One of the most important aims of privatization is to complete this structural transformation.
Accordingly, Türk Telekom, which produced 83 percent of its revenues from fixed voice line in 2005, will mostly have sales revenues as of the end of 2021. Mobile (34%), Fixed Broadband (31%), Fixed Voice (8%), and Enterprise Data (7%) made up of segments.
Looking at the revenue and profitability data, Türk Telekom, which continues to exist as a constantly developing and growing company, 19.6 percent growth in 2020with the ratio e 28.3 billion TL revenue produced. It increased its profitability by 32 percent in 2020 compared to the previous year and 3.2 billion TL net profit for the year closed with. Strong performance continued in 2021: Revenues in this period compared to the previous year increased by 21.2 percent and reached 34.3 billion TL., net profit reached TL 5.8 billion with an increase of 81.3 percent.
In the time to date Turkish telecom only in the field of mobile communication With an investment of more than 6 billion USD together with its shares in Avea (renamed TT Mobil) increased it to 100 percent, It has completed its 3G and 4.5G investments, with a quality network and competitive commercial applications. 30 percent market share created an upcoming mobile operator.
Concession agreements require the establishment and operation of the infrastructure for a certain period of time, the extension of the period at the end of the concession period, or the delivery of the infrastructure to the state if it is not extended.
Between TVF and LYY made Share Purchase Agreement There is no relationship between the fixed concession issues of Türk Telekom and Türk Telekom. Many times, we see that Türk Telekom’s focus is on fixed concession. However, it must be said that this approach is not correct. Even though the fixed concession granted to Türk Telekom will expire in 2026, Türk Telekom is not an asset that can only be evaluated around the fixed concession issue as it was in 2005 when it was privatized. TVF’s motivation to act and the company valuation, which is the basis for the price of the deal, already reflect this.
It is clearly stated that in the coming periods, both fixed and mobile privileges, including 5G, will be discussed on a healthy basis with the participation of all stakeholders, and that no one should doubt that the authorities will make prudent decisions on such a sensitive issue.
Allegations in the press about the sale of Türk Telekom
- When Oger bought Türk Telekom, it was known that the company had excess cash in its vault, did this money belong to Oger?
At the date of privatization of Türk Telekom, sufficient portion of the existing cash was left in the company to carry out daily operations, and the remaining amount was transferred to the Ministry of Treasury and Finance (then the Undersecretariat of Treasury) (“Treasury”). These amounts 3.8 billion TL in total’is Therefore, the frequently repeated claims that large amounts of cash remain in the company’s vault and pass to OTAŞ are false.
- It put up for sale 150 million meters of copper cable, worth 10 billion dollars, without notifying the Public Disclosure Platform. OTAŞ claimed to have earned billions of dollars by selling the infrastructure of the institution.
OTAS, Following the privatization of Türk Telekom, Türk Telekom shares owned 55 percent and the debt arising from this sale to the Treasury. has paid. This transaction is not a lease, but a sale and transfer of ownership. All operators in Turkey carry out their communication activities within the scope of term concession agreements. In this context, Türk Telekom signed a concession agreement with the Information Technologies and Communications Authority (“BTK”) for the execution of telecommunication services and the establishment and operation of the telecommunication infrastructure within the framework of the current legislation. The duration of the said concession agreement is 21 years. Detailed information on the subject is shared with the public on the Privatization Administration page.
The rights granted to Türk Telekom by the BTK for 21 years and the Share Sale Agreement and the transfer of ownership of Türk Telekom’s shares by the Treasury to OTAŞ are completely different issues. In Türk Telekom, no infrastructure sales were made within the scope of privatization. The 21-year period of the concession agreement is for Türk Telekom to update its infrastructure investments required by the sector and technological developments. In this context, projects financed by the sale of copper cables are carried out in line with the realization of the vision of fiberization by updating the old technology with the new technology. Therefore, contrary to what is claimed, the proceeds from these sales do not enter OTAŞ’s safe, but Türk Telekom’s safe and are used for investment. As of the end of 2021, since Türk Telekom’s privatization, amount of investment made 55.3 billion TL (18.6 billion dollars). The statement ‘Moreover, OTAŞ earned billions of dollars by selling the institution’s infrastructure’ is a claim that does not reflect the truth.
- The allegation that Türk Telekom real estate was sold and emptied
All kinds of real estate sales of Türk Telekom are carried out in accordance with the law, within the scope of the company’s articles of association and with the decision of the board of directors. When we look at the details of these sales and the investment expenditures, it is not possible for OTAŞ to gain billions of dollars from the sale of Türk Telekom’s infrastructure, as claimed. Within the scope of privatization, OTAŞ paid the entire debt of 6.55 billion dollars to the Treasury as 7.06 billion dollars with interest, in return for 55 percent of Türk Telekom’s shares.
- The allegation that the Hariri family bought Türk Telekom with loans from Turkish banks
55% of Türk Telekom shares were privatized for a price of 6.55 billion USD, 20% of which is cash and the remainder is 5 years (annual LIBOR + 2.5 interest). Ojer Telecommunication Inc. (OTAS) paid off the balance of the share sale early and paid off all of its debt; As a result of this transaction, 7.06 billion USD entered the state coffers in the period of 2005-2007. The loans used by OTAŞ for this purpose and the transfer of shares to the banks as a result of payment difficulties have nothing to do with the activities of Türk Telekom and Türk Telekom. It is purely a commercial relationship between OTAŞ and banks.