Turkey’s Richest Man Is Trying to Renegotiate $7 Billion in DebtBy , , and
Ulker is seeking to renegotiate as much as $7 billion of debt
Yildiz boss met bank chiefs Tuesday, was ‘moved’ by support
Murat Ulker, Turkey’s richest man and owner of Godiva chocolates and McVitie’s biscuits, said he met with five bank bosses to renegotiate as much as $7 billion of debt for his company Yildiz Holding AS.
“We spoke about many details,” Ulker said, adding that he was “moved” and “pleased” at the support he received from the bank bosses. The meeting was held on Tuesday evening in Istanbul.
Ulker and the bank chiefs discussed how they were committed to resolving the debt issue, but didn’t go into details of any restructuring or new facility, according to the Yildiz boss.
Ulker Biskuvi Sanayi AS, a unit of Yildiz making snacks, fell 1.6 percent to 22.20 liras after reversing gains of as much as 1.8 percent in Istanbul. Gozde Girisim Sermayesi, a private-equity arm of the group, rose 2.9 percent to 5.71 liras.
Istanbul-based Yildiz last month requested the largest loan ever from Turkish banks, citing difficulties with an existing financing structure that requires it to make monthly loan repayments that sometimes exceed $1 billion.
Murat Ulker was again the richest man in Turkey with a net worth of $4.8 billion that increased $1.1 billion over the year earlier, according to a Forbes report published on Thursday.
“It is important to emphasize that Murat Ulker’s $4.8 billion net-worth figure is separate from the debt-refinance negotiations the group has for a while,” Burcak Guven, editor-in-chief of Forbes Turkey, said in an emailed statement about the billionaire.
In a letter to 10 banks dated Jan. 29, Yildiz asked them to create a consortium, syndication or joint finance group to consolidate their loans to the company. The letter, which was viewed by Bloomberg and verified by two people with direct knowledge of its contents, was signed by Yildiz Chief Financial Officer Mustafa Tercan and deputy chairman of the board Ali Ulker.
“Prolonging of the resolution process is not supportive of share performances,” Melis Pocar, an analyst at Istanbul-based Oyak Securities, said by email.
The 10 banks concerned are Yapi & Kredi Bankasi AS, Akbank, TC Ziraat Bankasi AS, Turkiye Halk Bankasi AS, Turkiye Garanti Bankasi AS, Turkiye Is Bankasi AS, Turkiye Vakiflar Bankasi TAO, HSBC Bank AS, Denizbank AS and QNB Finansbank AS. The group of lenders chose Yapi Kredi as the leader in the negotiations.
After Yildiz sent the letter, Akbank made a separate loan deal worth $1 billion with the company, breaking from the rest of the lenders’ group.
The refinancing request reveals previously unknown money challenges at one of Turkey’s largest conglomerates, a company that earns about $12 billion in annual revenues and employs more than 60,000 people around the world. Yildiz’s letter said it was burning $10 million to $30 million a day, or $500 million to $600 million a month, to repay its mostly short-term loans. The repayments required in February exceeded $1 billion, the company said.
Yildiz requested that the banks consolidate their respective loans into a single credit with a maturity of nine years, and asked that they grant it a three-year grace period before repayment begins. It asked that interest-only payments begin in the fourth year, with principal payments starting in year five.