ISTANBUL - Turkey's Cukurova Group said on Monday it was suing Alfa Telecom Turkey Ltd because the Russian firm will not accept the repayment of all of Cukurova's debts owed to it before they mature.
Earlier this month Alfa opened a court case against Cukurova, a main stakeholder in Turkey's leading GSM operator Turkcell, claiming that Cukurova had defaulted on an outstanding debt of $1.35 billion. The debt is backed by an indirect stake in Turkcell.
Cukurova says it has paid $357 million in principal and $217 million in interest and denies any default on payments on its debt, which is due in full in 2011.
Cukurova also found $1.5 billion in financing to pay its $1.35 billion debt to Alfa but the Russian investment group rejected this.
Alfa says that Cukurova has been trying to use its indirect stake in Turkcell in its deal as collateral to raise new financing to repay the debt.
"A court case was launched on May 25 in order to ensure that Alfa accepts this payment and allows us to redeem our (Turkcell) shares," Cukurova said in a statement to the Istanbul Stock Exchange.
In its statement, Cukurova said its debt to Alfa topped $1.447 billion when $96.83 million interest charges were added.
Under a deal in 2005, Alfa loaned Cukurova $1.7 billion and bought $1.6 billion of convertible bonds, which it later converted into a 13.22 percent stake in Turkcell.