Telsim reserve price set at US$2.8 billion as settlement agreed

Earlier this month, the process leading to the sale of Telsim was officially announced, with a reserve price for the operator of US$2.8 billion.

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By  Tawanda Chihota Published  August 29, 2005

Nokia has announced reaching a settlement in its financial claims against Turkish cellco Telsim subject to the successful sale of Telsim's assets. Under the terms of the arrangement with Telsim and the Turkish Savings and Deposit Insurance Fund (SDIF), which currently controls and manages Telsim's assets, Nokia will receive a settlement payment following the completion of the sale of Telsim's assets. The settlement is subject to the formal board approval of SDIF, and the amount of the settlement will depend on the final proceeds from the future sale of Telsim's assets. Nokia's claims arose from Telsim's default on its repayment obligations under a loan facility related to network equipment delivered in 2000. In February 2004, the Arbitral Tribunal in Zurich fully approved the claim against the Turkish company. Earlier this month, the process leading to the sale of Telsim was officially announced, with a reserve price for the operator of US$2.8 billion. Applications will be sent out to potential bidders September 1, with pre-qualification taking place September 19. Bidding will take place between December 5 and 19. Telsim is Turkey’s third largest cellco with around 4 million subscribers. The SDIF took control of Telsim and hundreds of other assets owned by the Uzan family OF turkey last year, following the collapse of banks controlled by the Uzans and massive fraud perpetrated by the family. Earlier this month Motorola also announced that it was enforcing a US$2.5 billion arbitration award against Telsim. The operator borrowed US$2 billion from Motorola at the peak of the telecoms boom and failed to repay the loan. The Uzans had also been found guilty of fraudulently inducing Nokia to make loans to Telsim, defrauding the Finnish equipment provider of around US$1.5 billion.

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