Turkey’s sovereign wealth fund struck a deal to acquire a 55 per cent stake in Turk Telekom for $1.7 billion from a consortium of banks which had been trying to offload the asset since 2019.

In a statement, the Turkey Wealth Fund disclosed it had signed a contract to buy the stake having been in negotiations with Turk Telekom majority shareholder LYY Telekomunikasyon (LYY) since mid-December 2021.

The deal is subject to regulatory approval.

Turkey Wealth Fund GM Arda Ermut said the telecommunications provider was “a big brand not only in Turkey but also globally” adding his company could “add additional value to the telecommunication sector”.

LYY was set up by a group of banks to hold the asset when they took control from previous owner Ojer Telekom after it failed to keep up repayments on $4.8 billion-worth of loans taken to originally buy the stake.

In 2019, several major LYY shareholders announced they planned to sell the stake in Turk Telekom, with media reports at the time suggesting it was worth around $3 billion.

Statistics on Turk Telekom’s investor relations website show Turkey Wealth Fund already owns 5 per cent of the operator, with a further 25 per cent held by the country’s treasury. The remaining 15 per cent is floated on the stock exchange.