Samsung, Webuild seek to restructure $590 million of Turkish hospital debt

A consortium of companies including Samsung of South Korea and Italy’s Webuild will seek to renegotiate 483.5 million euros ($590 million) of loans used to fund the construction of a Turkish hospital.

The firms, also including Turkey’s Kayı İnşaat and Actus Asset Management, are asking lenders such as the European Bank for Reconstruction and Development (EBRD) and the Export-Import Bank of Korea to extend the maturity of the 18-year loan, Bloomberg reported on Friday, citing people with knowledge of the matter.

Samsung owns a 26.5 percent stake in the project, with the remaining firms controlling 24.5 percent each, Bloomberg said. They are in the process of choosing consultants to help resolve governance issues and then to manage talks with creditors, it said.

The consortium borrowed the money in 2016 to fund the 600-million-euro hospital in the southeastern city of Gaziantep. The facility, with 1,875 beds, is due to be completed this year, according to the Health Ministry.

Samsung and Webuild are the latest foreign firms to become ensnared in financial travails in Turkey sparked by a slump in the value of the Turkish lira, which has made debts denominated in foreign currency more expensive to repay. Turkey’s economy was embroiled in a currency crisis in 2018 and the lira took another nose-dive last year, losing about 20 percent of its value against the dollar.

The lira’s troubles have led to delays in the construction of several of 17 hospital projects since 2015, which are being carried out under a private-public partnership model at a total cost of $10 billion, Bloomberg said. Turkish opposition parties and some political commentators have criticised the projects, which provide state loan and income guarantees, for their high cost to the country.

Another consortium, including Turkey’s Gama Holding and Türkerler İnşaat, restructured 900 million euros of debt in December used to build hospitals in the western city of Izmir and in Kocaeli in the country’s northwest, Bloomberg said. General Electric owns a stake of about 10 percent, it said.