May 30 2018

Gama refinancing $1.5 billion latest Turkish debt applicant

Turkey’s Gama Holding is seeking to ease repayment terms on about $1.5 billion of loans with creditors, becoming the latest firm to ask for financial help from banks.

The company, active in construction and energy, wants to restructure a loan of almost $1 billion and to refinance $500 million it borrowed to build a natural gas plant in 2013, according to Habertürk newspaper, citing a report by Bloomberg, a partner of its parent in a local TV franchise.

Gama’s application to banks comes after several other large conglomerates in Turkey sought to ease the cost of borrowing by applying to banks to restructure loans. The lira has slumped to record lows against the dollar, making debts more costly to repay.

Companies including Yıldız Holding, the maker of Godiva chocolates, and Doğuş Group, owned by Turkish billionaire Ferit Şahenk, are among firms seeking to ease repayment of debts amounting to a total of more than $10 billion.

Turkey’s government sought to reduce financial stress on firms last year, following a failed military coup in July 2016, by offering about 250 billion liras ($55 billion) in loan guarantees that were used as collateral by firms for refinancing larger debts. With inflation in double digits and the lira losing value, loan growth in Turkey is slowing and restructured lending is expanding, increasing risks for banks as they seek to repay their own foreign loans and extend their maturities.