The U.S. government has stepped in to help Motorola Inc. recover debts from Turkish mobile operator Telsim Mobil Telekomunikasyon Hizmetleri AS, according to a report in the Financial Times newspaper on Friday.
U.S. Undersecretary of State for Political Affairs Marc Grossman recently contacted the Turkish envoy in Washington D.C., and the U.S. embassy in Turkey has also been in contact with Turkish officials over the US$2 billion debt, according to the report.
Telsim missed a $728 million payment due on April 28 as part of a $2 billion infrastructure and handset financing agreement, according to the report. In discussing the rescheduling of this payment Motorola discovered that the Uzan family, which controls Telsim, has instigated a capital increase in the company. This has diluted the value of Motorola's 66 percent stake, held as collateral for the loan, the report said.
Motorola accelerated all repayments in June, after the April payment was missed. Telsim had been given 30 days to remedy the nonpayment, said Mark Durrant, Motorola's director of communications and public affairs for Europe, Middle East and Africa. Motorola is now "exploring all alternatives for repayment including legal action," he said.
Telsim has also defaulted on a $240 million repayment to Nokia Corp, part of a $719 million debt also backed by shares, the report said.
Telsim's capital increase was approved at a shareholder meeting in Ankara in April 24, without notification to Motorola or Nokia, according to the report, which added that both companies have employed private investigators to look into the wealth of the Uzan family.
The U.S. approach has been to suggest that the dispute may discourage foreign investment in Turkey, whose economy is already in difficulties, according to the report.
Telsim recently paid 25 million euros ($21.7million) to Nokia after a court ruling on a separate 35 million-euro debt, according to the report.