(Bloomberg) -- The majority owner of Turkey's biggest phone company failed to pay another installment on its $4.75 billion debt, pushing the largest syndicated loan ever extended in the country further into arrears, four people with knowledge of the matter said.
Otas, an Ankara-based special purpose vehicle that owns a majority stake in Turk Telekomunikasyon AS, or Turk Telekom, missed the $290 million repayment due last week after skipping a payment for the same amount in September, said the people, who asked not to be named because the matter is confidential. The outstanding principal on the loan, received from 29 Turkish and international lenders in 2013, is $4.6 billion, they said.
The company has struggled to make dollar-denominated loan payments as the lira's 51 percent drop since 2013 dents the converted value of Turk Telekom's local-currency dividends. Owned by the Hariri family's Oger Telecom Ltd., Otas missed the payment after the lenders -- including Akbank TAS, Turkiye Garanti Bankasi AS, BNP Paribas and Turkiye Is Bankasi AS -- rejected an offer by Saudi Telecom Co. to lend it $160 million in exchange for an ownership stake.
Turk Telekom pared an earlier jump to a seven-month high after the report on the missed payment, and its shares were up 0.7 percent at 5.94 liras as of 4:50 p.m. in Istanbul. Akbank was little changed at 8.54 liras while Garanti rose 0.6 percent to 8.91 liras.
$1 Billion Loss
The lenders refused Saudi Telecom's plan in February because it involved taking a loss of more than $1 billion on the loan's principal, people with knowledge of the matter said at the time. Negotiations with Saudi Telecom on the offer are still continuing, two of the people said.
Spokespeople for Oger Telecom and Turk Telekom declined to comment. A Saudi Telecom executive didn't answer phone calls seeking comment.
The Turkish Treasury holds a 25 percent stake in Turk Telekom, while the country's newly established wealth fund owns 6.7 percent. Otas owns 55 percent, and the rest is publicly traded.
Turk Telekom reported a loss for 2016, its first since 2005, and implied it wouldn't pay any dividend to shareholders. Akbank has about $1.5 billion in exposure to the loan -- the most of any bank -- while Garanti Bankasi lent about $1 billion, people with knowledge of the matter said in October. Akbank and Garanti were among six bookrunners on the loan.
To contact the reporters on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net, Asli Kandemir in Istanbul at akandemir@bloomberg.net.
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Benjamin Harvey, Paul Armstrong
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