Turkish companies said to seek debt restructuring as virus hits

The Turkish economy has shrunk by nearly 10 percent in the second quarter of this year due to the COVID-19 lockdown. (Reuters)
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Updated 16 September 2020

Turkish companies said to seek debt restructuring as virus hits

  • Pandemic lockdown has piled on troubles for businesses already struggling after the 2018 currency crisis

ISTANBUL: Debt-laden Turkish companies are seeking more time to repay bank loans after the coronavirus pandemic upended plans to sell assets, according to four sources with direct knowledge of the matter.

Even before the virus hit Turkey in March, firms were seeking lower rates from banks after an aggressive monetary easing campaign and since then, large and small companies are looking for further revisions to nearly all of the restructurings agreed in the past two years, according to one source.

Conglomerate Dogus was among the companies preparing for talks, according to the source, who requested anonymity.

In response to a query from Reuters, Dogus said: “Our regular and usual negotiations with banks are, as always, underway within the framework of good relations.”

Other restructuring talks involving major companies are already happening, the source said.

Businesses in Turkey, as in other parts of the world, have been hit hard by lockdowns aiming to stop the spread of the virus, with the economy shrinking nearly 10 percent in the second quarter.

But Turkish companies were already weakened by a 2018 currency crisis and some, including Dogus, Yildiz and several energy firms,  signed billions of dollars worth of restructuring deals.

Asset sales were a key part of some of those restructuring agreements but the impact of the coronavirus crisis has deterred some would-be buyers, the sources said.

Turkish conglomerate and food giant Yildiz last month announced a revision in which it paid off $600 million for its syndication credit and extended the maturity to 2030.

The company declined to comment for this story.

In February, Reuters reported some conglomerates, including Dogus and Yildiz, were in talks for cheaper loans after the central bank cut rates from 24 percent in mid-2019. The policy rate is now 8.25 percent but hikes could be in store given high inflation and a record low lira. 

While M&A activity has largely stalled this year, some deals were struck including Zynga’s purchase of Turkish mobile-game maker Peak for $1.8 billion in June. 


Saudi Arabia to host ‘virtual’ G20 meeting on oil markets

Updated 27 September 2020

Saudi Arabia to host ‘virtual’ G20 meeting on oil markets

  • Energy ministers will also discuss plans for ‘green’ economic recovery from ravages of coronavirus pandemic

DUBAI: Energy ministers from the G20 countries under the presidency of Saudi Arabia will meet virtually on Sunday to discuss volatile oil markets and plans for a “green” recovery from the economic shock of the COVID-19 pandemic.

The Kingdom is strongly backing a “circular carbon economy” strategy to remove harmful greenhouse gas emissions from the atmosphere.

The two-day event is the second time this year that energy policymakers have come together, following the historic meeting last April that helped stabilize crude markets in meltdown.

Markets have since recovered and the price of benchmark Brent crude has more than doubled, but doubts about their resilience have resurfaced amid fears of a “second wave” of economic lockdowns.

Prince Abdul Aziz bin Salman, the Saudi energy minister and chairman of the G20 event, has highlighted the need for tight discipline by members of the OPEC+ oil producers’ alliance to combat market “uncertainty.” 

“If we are serious about mitigating the impact of the shock and navigating through these extraordinary times, this is our only path,” he said.

The G20 said ministers would discuss ways to “strengthen collaboration toward market stability and security and discuss promoting and advancing sustainable energy systems through the Circular Carbon Economy platform,” and address “advancing universal access to energy and clean cooking for all.”

There is consensus on the need to mitigate harmful emissions, but some European countries and nongovernmental organizations are believed to be pressing for a stronger stance on fossil fuels.

The Saudi strategy, supported by the US and Russia, is for a more inclusive stance on hydrocarbon resources, while simultaneously promoting renewable sources such as solar and wind.