I suppose there’s both cosmic and comic justice that one
of the most Byzantine (and dysfunctional) ownership structures I’ve
ever seen with a public company would involve a Turkish company – the
mobile services operator Turkcell (TKC).
For years, a fractious ownership structure has impaired the company’s
ability to pay regular dividends, and has likely contributed to a
discounted valuation relative to the underlying fundamentals.
With
a series of transactions led by the Turkey Wealth Fund, those years of
sometimes-childish squabbles should be over, and Turkcell investors
should be able to look forward to a more consistent future for the
company and its dividends. While there are still significant risks here,
and some investors may actually see this transaction as adding to the
risks, I believe Turkcell remains meaningfully undervalued even with the
inclusion of a “Turkey discount” that reflects the elevated economic
and political risks of that country.
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A Simplified Ownership Structure Should Help Turkcell Investors
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