Bloomberg:  Turkish contractor in talks with banks to restructure loans

Turkey’s Yapi Merkezi is in talks with banks to restructure around $1 billion of loans, after a row over payments for a project in Tanzania hit the construction company’s cash flow, people familiar with the matter said, write Asli Kandemir and Kerim Karakaya of Bloomberg, in a great inside scoop.


The Istanbul-based contractor, which used the loans to build hundreds of kilometers of railways in the East African country, owes lenders around $3.2 billion, said the people, asking not to be identified as the negotiations are private. A bulk of the loans it wants to restructure was taken out from state-owned lenders in Turkey, they said.


Yapi Merkezi declined to comment.

In December 2021, Yapi Merkezi signed a $1.9 billion contract with the Tanzanian government to design and build 368 kilometers (229 miles) of rail network, followed by a 2022 deal to build another 165-kilometer line. Tanzania’s public auditor earlier this year criticized the terms of a loan agreement between the Tanzanian government and Standard Chartered Plc, which the watchdog said made the funds available on condition that Yapi Merkezi was hired for the job.


A wave of debt restructuring hit Turkish corporates after a currency crash in 2018, affecting tens of billions of dollars of credit repayments. Coronavirus lockdowns starting in 2020 resulted in a second wave, as falling demand hit companies.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.