Turkey

Turkish billionaire Ferit Sahenk is in talks to sell some of Europe’s most famous luxury hotels to the investment firm owned by Dubai’s ruler as part of a debt restructuring, people with knowledge of the matter said. The discussions involve properties including the historic Capri Palace in Italy, the Aldrovandi Villa Borghese in Rome and Istanbul’s Grand Hyatt, the people said, asking not to be identified because the talks are private, Bloomberg News reported. Dubai Holding is doing due diligence on the Capri Palace and Aldrovandi, one of the people said.

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Turkey’s biggest state-run bank will extend cheap loans to citizens struggling to pay off their credit-card debts, in a populist move designed to boost the economy before local elections in March, Bloomberg News reported. Citizens will be able to borrow from Ziraat Bankasi AS to pay back their card debt to banks, President Recep Tayyip Erdogan told his party’s group meeting in parliament Tuesday. Ziraat Bank said in a statement it will offer loans for up to two years with a 1.1 percent interest rate per month, less than half the cost of the retail loan rate on its website.

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Soccer is the latest Turkish industry to face a large-scale debt revamp after the country’s top teams suffered money-losing seasons and borrowed heavily to buy marquee players. Turkey’s banking association and soccer federation are preparing to announce a restructuring plan for about 11 billion liras ($2 billion) of debt held by the nation’s soccer teams after reaching an agreement Friday, Bloomberg News reported. Shares of the country’s four listed clubs surged.

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Turkey’s currency has sustained a fresh blow in a grim 2019 debut marked by rising concerns over the global economy and angst that improving inflation data could prompt the central bank to prematurely reduce interest rates, the Financial Times reported. The lira has tumbled 4 per cent against the US dollar over the past two trading days, according to Refinitiv data. Thursday’s drop left it at TL5.5 to the buck, having closed last year at TL5.2877. It has not faced such a sharp two-day decline since the wake of the currency crisis in August 2018.

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More than 100 larger Turkish firms applied for protection from bankruptcy between Dec. 13 and Dec. 24, according to statements by Trade Minister Ruhsar Pekcan, AhvalNews.com reported. The number of limited and joint stock companies who have applied for protection from creditors increased to 979 since a currency crisis peaked in August, Pekcan said, according to a report yesterday in Hürriyet newspaper. She had put the number at 846 companies 11 days earlier.
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A group of Turkey’s major banks took control of Turk Telekom AS, the nation’s largest phone company, setting it up for a likely sale after previous owner Otas defaulted on a multi-billion-dollar loan, Bloomberg News reported. Akbank TAS will hold 35.6 percent of the special purpose vehicle set up to take on Otas’s 55 percent controlling stake, Turkiye Garanti Bankasi AS will have 22.1 percent of that entity, and Turkiye Is Bankasi AS’s share is 11.6 percent, according to filings Saturday.

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The Turkish economy slowed sharply this fall and looks set to contract this winter, presenting an immense political challenge for President Recep Tayyip Erdogan, who has overseen a debt-fueled boom that had made Turkey one of the world’s fastest-growing countries, The Wall Street Journal reported. Monday’s figures also present a conundrum for the country’s central bank, which defied Mr. Erdogan by sharply raising rates in September in an attempt to curb runaway inflation.

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How Turkey Created a Debt Crisis

“Everybody has a bankruptcy story,” says Cem Sari, who’s just lived through his own version, in a year that turned into a national trauma. Turkey’s economy roared into 2018 with growth rates that were the envy of the world—and vulnerabilities that had been building over years, Bloomberg News reported. It was like a car that could still reach high speeds, so long as the driver ignored the multiple warning lights flashing on the dashboard. And then it crashed, suffering a classic run on its currency and a brutal credit crunch.

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President Tayyip Erdogan’s AK Party on Tuesday submitted a bill to parliament to tighten Turkey’s bankruptcy law aimed at preventing what the government says is abuse of the regulation by some healthy companies, Reuters reported. A section of the current law is designed to give struggling firms temporary protection from creditors. Since going into effect eight months ago, it has seen a surge in applicants, officials and bankruptcy lawyers say, as a currency crisis has pushed the inflation rate to 25 percent and shaken the economy.

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