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Turkish telecom giant may end up in government hands again

The 2005 privatization of Turkish telecommunication company Turk Telekom, the largest in Turkey’s history, may go to waste as the majority stakeholders are struggling to repay loans.
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Turk Telekom, the main actor in Turkey's telecommunication sector and the biggest sell-off in its privatization history, is in deep trouble and may end up back in government hands. The giant company was privatized in 2005, as Ojer Telekomunikasyon A.S. (Otas) — a subsidiary of Oger Telecom, owned by the Lebanese Hariri family — acquired a controlling 55% stake. The turbulence jolting the company stems from Otas' failure to repay loans in what is described as Turkey's biggest ever default.

The 60-day deadline the Turkish Treasury set for Otas to repay its $4.75 billion bank loan expired Oct. 1 amid reports that the treasury was mulling temporary changes in Turk Telekom's executive board. The reports were based on remarks that Transport, Maritime Affairs and Communications Minister Ahmet Arslan made Sept. 20. Arslan said, "Ownership may change hands in [Turk Telekom]. The treasury or we, as representatives of the treasury, will do what is required under the contract." The minister added, "We cannot allow the erosion of a pre-eminent establishment." The minister stressed how "issues stemming from Turk Telekom’s shareholders are not issues that affect Turk Telekom’s operations and development."

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