Turkish State Fund Mulls Tender for Seized Pay-TV Provider Digitürk

Istanbul, August 23, 2013 — The Savings Deposit Insurance Fund of Turkey (TMSF) is considering the initiation of a tender for the sale of pay-television platform Digitürk although the process has not been finalized.

Reuters and other local media reports have reported that TMSF and Çukurova’s are coordinating the plan for Digitürk and that they are looking at several alternatives, including the direct sale of the broadcaster or sale with a tender.

The state fund TMSF seized in May this year Digitürk, the most the most valuable of the Çukuorva Holding assets, after the group’s failure to pay its huge debts. TMSF actually seized 12 companies owned by the Çukurova Group.

The TMSF has already sold Çukurova’s broadcaster “Show TV” to business group Ciner for 402 million Turkish Liras (US$202.05 million). TMSF has also sold Sky 360 TV to a consortium composed of the Turkish companies Kolin, Limak and Cengiz. The consortium also acquired Çukurova’s other media assets, daily Akşam and Alem Radio, and has also won the tender to build and operate the third Istanbul airport.

Digitürk has attracted interest from a number of companies including Türk Telekom and D-smart, Digitürk’s biggest rival, since June. Türk Telekom submitted a non-binding offer to buy a 53 percent stake in the company in July, but the Çukurova Group found Türk Telekom’s $530-million offer too low, according to reports.

TMSF head Şakir Ercan Gül has told Turkey’s Daily News that Digitürk has been invaluable for Turkey’s Çukurova Group in paying off its debts, but some other seized companies of the group, such as Show TV and motor company BMC, have been in deep trouble.

 The U.S. Providence Equity Partners, also owns 47 percent of Digitürk.

Çukurova Group’s downhill run started as early as 2001 at the height of the country’s severe recession, which resulted in huge financial losses to many banks that gave loans to companies within the Çukurova group. Cukurova’s CEO, Mehmet Emin Karamehmet is reportedly in need of at least $4 billion to settle his debt to the government.

French Canal+ Group has earlier been reported to be among the possible buyers of Digiturk. In 2011 Canal+ Group unsuccessfully attempted to buy Providence's shares. The company was then valued at around €1 billion.