Nokia, the world’s largest maker of mobile phones, on Monday reached a deal with the Turkish government, enabling it to recover claims against Telsim, Turkey’s second-biggest mobile operator, once that business is sold.
Under an agreement with Turkey’s Savings and Deposit Insurance Fund (TMSF), which controls and manages Telsim, Nokia will receive a payment following the sale, due in December, with the final amount depending on how much is raised by the TMSF sale.
Telsim was taken over by Turkey from the bankrupt Uzan family along with many other assets. TMSF claims the Uzans owe it nearly $6bn and it is planning to recoup part of this through the sale.
Nokia and US rival Motorola lent Telsim an estimated $3.4bn in 2000 to help the Turkish group build its mobile network.
Since then, Telsim has defaulted on loan repayments, leading Nokia to write down €669m ($818m) for its exposure.
The Finnish group said on Monday: “Nokia sees this as a positive step in a consistent and co-operative approach to resolving the issue and also trusts that it will facilitate a successful sale of Telsim’s assets.”
Motorola is also in negotiations with TMSF for its Telsim claims. Murat Ongor, country manager in Turkey for the US telecoms equipment group, said it hoped to reach an agreement soon.
“We prefer to agree with [TMSF] rather than go through other legal channels round the world,” Mr Ongor said.
Meanwhile, Motorola in the US said it was “pursuing and would continue to pursue all lawful means” available to recover more than $2bn owed by Telsim, plus a fraud judgment it was awarded over a year ago against the Uzans. , “for having perpetrated a massive fraud against Motorola.”
The US-based mobile phone maker said it intends, “notwithstanding the actions of the Turkish Government, to take all available steps to recover monies it is owed, whether from the Uzans, Telsim, the Government of the Republic of Turkey or any party who succeeds to the assets of Telsim.”
In December, Motorola won a judgment in the English courts allowing it to pursue and seize assets from two members of the Uzan family. That followed similar decisions in the US.
The ruling by Mr Justice Cooke effectively “domesticated” a US district court judgment last year. That found that the Uzans had committed a “massive fraud” in obtaining loans from Motorola and Nokia, and awarded the companies more than $2bn in damages, compensation and interest.
Motorola had previously sought various freezing orders against the Uzans in the English courts and won contempt orders when members of the family failed to appear for hearings.
The English jurisdiction is relevant because Cem Uzan, the Turkish businessman-turned-politician, previously lived in the UK.
and owned a house in London’s Belgravia.
Monday’s agreement with Nokia takes TMSF a step nearer to being able to auction Telsim. The sale is expected to attract substantial interest from European and other international telecoms operators because of the fast-growing market for mobile services in Turkey.
In Helsinki, Nokia shares closed 1 per cent higher at €12.65.
The TMSF set a minimum bidding price of $2.8bn for Telsim. Interested parties have to apply for eligibility by September 19.