Nokia Receives $340M in Telsim Settlement

Posted 26 May 2006 @ 10:37 pm EET     Print     Reprint     E-Mail     Comments

HELSINKI, Finland (AP) - Nokia Corp. said Friday it has received US$341.25 (euro436.7 million) on the completion of the sale of Turkish operator Telsim's assets, after the two companies agreed on a settlement last year.

The agreement, in August, was made possible by an arrangement between Telsim and the Turkish Savings and Deposit Insurance Fund, TMSF, which sold Telsim's assets to Vodafone.

"Nokia is pleased with the resolution of the issue with Telsim," the world's largest mobile phone maker said. "The closing of the settlement agreement opens the way for Nokia's continued support for Telsim's operations, which will benefit not only Telsim's subscribers but also the Turkish telecommunications market at large."

Telsim, and some 200 other businesses owned by the Uzan company, was taken over by TMSF in 2004 to collect debts stemming from the group's troubled flagship bank, Imar.

In August 2005, the Turkish government put Telsim up for sale, setting an estimated value of US$2.8 billion for the country's second-largest mobile operator with Dec. 5 as the deadline for final bid offers. The sale of the Turkish company, estimated to have 8 million customers, was delayed because of legal troubles over debts owed to U.S. cell-phone maker Motorola Inc. and Nokia.

The Finnish mobile phone maker said its claims arose from Telsim's default on its repayment of a loan borrowed in 2000 by the Uzan family that owned Telsim at the time. Nokia and Motorola, jointly sued the Uzans in 2001, alleging that the family had no intention of paying back the US$2.7 billion loan it borrowed to build a wireless network.

Telsim's loans were related to network equipment, Nokia said. In February 2004, the Arbitral Tribunal in Zurich, Switzerland, fully approved the claim against Telsim.