Saudi Telecom offering $750 million in Turkey debt talks

STC willing to inject additional equity into Otas, which owns 55 percent of Turk Telekom

STC is also offering to acquire Otas which has missed two $290m installments on a loan it took in 2013 from 29 Turkish and international banks Courtesy Saudi Telecom Company

Saudi Telecom Co. is offering to inject $750 million (Dh2.75b) into Turk Telekomunikasyon AS’s owner as Turkey steps up pressure to resolve debt talks on a $4.75 billion loan, people familiar with the matter said.

In a new proposal presented to creditors at the end of July, STC said it’s willing to inject $750 million of additional equity into Otas, which owns 55 percent of Turk Telekom, and restructure the remaining $4 billion in two new loans with tenures of up to 10 years, said the people, asking not to be identified because the information is private.

STC is also offering to acquire Otas, an Ankara-based special purpose vehicle, or all its stake in Turk Telekom, one of the people said. STC currently holds an indirect stake in Otas through its ownership of a 35 percent stake in Oger Telecom, which fully owns Otas.

Banks and STC have been locked in debt talks for almost a year after Otas failed to pay the September installment on the loan, the country’s biggest-ever syndicated facility. Otas struggled to make the dollar-denominated loan repayments after the lira’s slump dented the converted value of Turk Telekom’s local-currency dividends. Turkey’s Treasury gave Otas 60 days from early August to find a solution for the debt talks before it may take control of the company’s management, the people said.

Lenders have until mid-September to respond to STC’s proposal, one of the people said. Turk Telekom, Oger and STC all declined to comment.

Otas has missed two installments of $290 million each on the loan it took in 2013 from 29 Turkish and international banks. Akbank TAS has about $1.5 billion in exposure to the loan, Turkiye Garanti Bankasi AS about $1 billion and Turkiye Is Bankasi AS about $500 million, according to their public filings.