Turkish bankruptcy protection filings continue to pile up
Turkey’s President, Recep Tayyip Erdoğan, and the ruling Justice and Development Party (AKP) have played down talk of an economic crisis this year despite high inflation and a currency that has plummeted by around 35 percent. Worrying signs, however, continued this week as 10 more Turkish companies joined the thousands to have filed for bankruptcy protection.
One of these, Bilin Logistics, should have been celebrating this week after the soft opening of Istanbul’s third airport on Monday. Bilin is one of six companies sharing a 25-year, 250 million euro contract to service the airport. Despite picking up a lucrative piece of business, the company has been forced to file for bankruptcy protection, Turkish business news site Patronlar Dünyası reported.
Another of the firms to seek protection was Egezemin Construction, which is known for its large-scale projects in Turkey’s second largest city, Izmir. Egezemin was reportedly one of five construction companies based in Izmir that have recently applied to courts for bankruptcy protection.
In fact, of the over 3,000 Turkish firms to have filed for bankruptcy protection this year, 75 percent are construction companies. The booming construction sector has been a feature of the AKP’s rule that has helped keep the party in power since 2002; this year, however, severe problems have hit the economy and the sector has been hard hit.
High inflation and interest rates have discouraged buyers from the housing market, while heavy losses in the lira’s value have made it much more difficult for companies to repay loans taken out in foreign currencies.