Turkey’s central bank kept its benchmark interest rate on hold on Wednesday, sticking to a promise to stand firm on inflation even as the economy suffers a sharp slowdown in growth, the Financial Times reported. In its final meeting before critical local elections at the end of March, the bank’s monetary policy committee (MPC) said that its one-week rate repo rate would remain at 24 per cent. Turkey has struggled with sky-high inflation following a meltdown in the lira, which wiped almost 30 per cent off the currency versus the dollar last year.
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Yildiz Holding AS, a debt laden Turkish food conglomerate, plans to sell its Jacob’s cracker unit and production facilities in the U.K. this year, according to two people with direct knowledge of the matter. The owner of McVitie’s digestives and Godiva chocolates may offload the entire business or a stake to an investor, the people said, asking not to be named because the talks are confidential, Bloomberg News reported. The company is working with Oppenheimer Holdings Inc. on the sale, the people said.
Turkey’s biggest buyer of soured debt expects sales of non-performing loans to increase by 33 percent this year as banks free-up capital to cope with a surge in corporate-debt restructurings, Bloomberg News reported. Lenders will probably sell about 10 billion liras ($1.9 billion) of bad-loan portfolios this year, Hayat Varlik Yonetim AS Chief Executive Officer Hilmi Guvenal said in an interview. Banks may receive up to 500 million liras this year from the sale of NPLs to asset managers such as Hayat Varlik, he said. There are 19 distressed-loan buyers in Turkey.
Turkey’s government is making cheap credit a key part of its campaign trail, pushing banks to take on greater risks in an economy that’s already teetering on the brink of recession, Bloomberg News reported. President Recep Tayyip Erdogan’s administration is urging state-owned lenders to extend cheap loans to industries spanning agriculture to soccer clubs and help consumers pay off their credit cards or get below-market interest rates on mortgages.
The Turkish owner of Godiva chocolates and McVitie’s biscuits has stepped off the acquisition trail. After years of global expansion, Yildiz Holding AS is speeding up asset sales to focus on its core business and underpin Turkey’s largest loan restructuring deal, which it struck with lenders last year, Bloomberg News reported. The Istanbul-based food producer plans to seek partners in units including Godiva’s business in Japan and some other Asian markets, while exiting non-core assets such as its mining and brick business.
Turkish banks have not been receiving compensation since August for non-performing loans made to companies covered by guarantees from the state Credit Guarantee Fund (KGF), five sources familiar with the matter said. The KGF is designed to stimulate the economy by guaranteeing loans to small- and medium-sized firms that could not otherwise obtain credit, Reuters reported. Such loans were widely used in 2017 to boost the economy, prompting the biggest credit growth in recent years.
A half-built Turkish residential development of hundreds of mini-castles won a reprieve from bankruptcy on Friday when creditors voted to allow a construction company to complete work on the project, Reuters reported. The Burj al Babas project, set among hills about 200 km (120 miles) east of Istanbul, was conceived as a luxury housing development with row upon row of identical cream-coloured homes, shaped like chateaus with grey turrets and all built around a shopping mall and hotel.
A consortium building Turkey’s Gebze-Orhangazi-Izmir motorway has started seeking international advisers to value the project ahead of a possible stake sale, Otoyol Investment company said on Tuesday, Reuters reported. In a first stage, the consortium will determine the value of the project and potential buyers, the consortium, which includes Italian construction group Astaldi, said in a statement. “It is a lengthy process to sell a stake in a project of this scale,” the consortium said, adding it would be up to the partners to decide whether to dispose of their share.
The parent company of one of Turkey’s largest food producers is in talks with lenders to restructure a portion of its $2 billion debt pile, according to two people with knowledge of the matter. Anadolu Birlik Holding AS wants to extend maturities on loans it took out to finance investments in the energy sector, the people said, who asked not to be identified because the talks are private, Bloomberg News reported. The company is seeking to restructure less than half of its total debt and the negotiations may be finalized within the next two months, one of the people said.