Turkey’s banks begin restructuring largest corporate debts

Turkey’s banks are to begin the process of restructuring the largest debts of the corporate sector under a government approved plan, Dünya newspaper reported citing a statement from the Banks Association of Turkey (TBB).

The measure will apply initially to companies with total debts of more than 25 million liras, Dünya said citing the TBB. Applications can be made to restructure the loans from one or more of the three banks who lent most money under the relevant loan agreement, the newspaper said.

Turkish banks have been saddled with tens of billions of dollars of non-performing loans and other troubled debts since a currency crisis that peaked in August last year. The government is backing plans to restructure the loans as it tries to free up capital for lending to the economy, production and employment.

The TBB said the planned restructuring agreements will be announced publicly once they are signed. Banks who agree to the restructuring must drop any legal proceedings to seize the assets and recover the debts of applicant firms and refrain from starting new proceedings, it said.

Approval for a similar restructuring plan for companies with loans totalling less than 25 million liras is still pending, TBB said.