Mar 01 2018

Turkey’s richest man meets with bank bosses over debt

Murat Ülker, Turkey’s richest man, met with the bosses of five Turkish banks this week to renegotiate as much as $7 billion of debt owed by his company.

Ülker, who has been forced to repeatedly refute allegations of ties to the banned movement of Islamist preacher Fethullah Gülen, who Turkey blames for masterminding the failed coup of 2016, discussed with the banks how they were committed to resolving the debt issue, Bloomberg reported on Thursday.

 “We spoke about many details,” Ülker said, adding that he was “moved” and “pleased” at the support he received from the bank bosses, Bloomberg reported. The meeting was held on Tuesday evening in Istanbul, the news wire said, adding that it didn’t go into specifics of any restructuring or new debt facility.

Ülker’s firm is perhaps most famous for owning the international Godiva chocolate brand and McVitie’s biscuits, the maker of Digestives. Yıldız Holding ran into trouble with the government in 2017 when an April Fool’s Day advertisement was interpreted by Turkish officials as a harbinger of another coup. In response to allegations Ülker was an ally of Gülen and supported the coup, he tweeted at the time: “We are on the side of the nation.”

Yildiz Holding, which owns Godiva chocolates, restructured $5.5 billion in debt

Analysts say Yıldız Holding’s financial restructuring plans are a result of recent leveraged buyouts to buy Godiva and other brands. Yıldız requested the largest loan ever from Turkish banks last month, saying it had difficulties with an existing short-term structure that required it to make monthly repayments sometimes exceeding $1 billion.

Murat Ülker is worth $4.8 billion, $1.1 billion more than a year ago, a Forbes report showed on Thursday. His net worth was calculated separately from the debt refinancing negotiations, Bloomberg said, citing Burcak Guven, editor-in-chief of Forbes’ unit in Turkey.

Ülker owes money to 10 banks including Yapi Kredi, Akbank, Garanti Bank, Isbank, and three state-run lenders; Ziraat Bank, Halkbank and Vakifbank. Yapi Kredi is the leader in the talks.

Akbank has made a separate loan agreement with Yıldız of $1 billion, breaking from the rest of the group, Bloomberg said.

Ülker has revenue of about $12 billion and employs over 60,000 people. The mostly short-term loans are costing it $500 million to $600 million a month on average, according to the company.

Yıldız has requested that the banks consolidate their loans into a single facility over nine years with a three-year grace period, effectively asking the banks to take on the debt until repayment starts. Interest-only payments would start in year four and payment of principle in year five.