MILAN, Italy -- Turkey today concluded the contest for the privatization of a majority stake (55%) in the Turkish telecommunications group Turk Telekom.

Oger Telecom, a newly created joint venture controlled by the Saudi-Lebanese group Saudi Oger Limited, through an investment vehicle, won the privatization contest with an offer of 6,550 million dollars.

The recently formed joint venture includes the Telecom Italia Group which – through Tim International – will initially invest 200 million dollars. The partnership between Saudi Oger Limited and Telecom Italia will focus on the mobile business, given that Oger Telecom – as announced separately – will continue its cooperation in fixed-line telephony with BT Telconsult.

Once the closing of the privatization takes place, Telecom Italia and Oger Telecom will sign a four-year Technical Assistance Agreement with Avea, the Turkish mobile operator in which Tim International has a 40% stake, Turk Telekom has 40% and local bank IsBank has 20%.

The agreement with Saudi Oger Limited establishes also that the stake in Avea held by Tim International can be transferred to Turk Telekom, with a partial reinvestment of the gains from the sale in Oger Telecom shares, or directly conferred to Oger Telecom.

The total value of Avea shares held by Tim International is between 400 million dollars and 600 million dollars, on the basis of pre-defined share-swap parameters.

A listing of Oger Telecom on the Dubai DIFX stock exchange is expected to take place in the next 3 years, with the possibility of Tim International participating pro quota in the initial placement. If Oger Telecom is not listed on the terms established, Tim International will have a put option towards Saudi Oger Limited for the Oger Telecom shares which it received for the sale of Avea plus 50 millions dollars worth of additional Oger Telecom’s shares subscribed in the initial transaction. In turn, if the put option is not exercised by Tim International, Saudi Oger Limited can exercise a call option on the same shares.

Tim International’s participation in Oger Telecom is the basis of possible future cooperation with the Saudi Oger Group in the telecommunications sector.

Telecom Italia SpA