Worse than real events, speculation is an epidemic
The Turkish saying in the headline perfectly describes the kind of market rumors that could cause more damage than actual events. Especially during economic turmoil and crisis, such market speculations can even bankrupt well-known companies. At such times, those speculations prompt creditors to call in their loans and a contagion effect sparks an epidemic that could affect healthy companies, too.
We have seen large conglomerates like Yildiz or Dogus restructure their loans with banks. We have also heard that leading construction companies are having difficulty in paying their debts.
Agaoglu, the largest construction company in Turkey, has announced it could sell some of its assets, including in the energy sector. However, we have been reading stories about many others that are seeking restructuring or composition agreements with their creditors.
Ex ts expected n energy
Energy companies have accumulated huge U.S.- and Euro-denominated debts and are having difficulty paying them. Unit Investment completed a successful restructuring deal but others, like Bereket Energy, have not been so lucky.
The Czech energy company, CEZ, said it would prefer to exit Turkey’s energy sector. However, without bidders it is also seeking restructuring of its debts in Turkey for its JV AkCez power distribution that it co-owns with Akkok Holding.
BIS Enerji is also seeking loan restructuring. Daily DUNYA Energy editor Mehmet Kara details how energy companies got in such trouble in page 5 of this week’s issue.
Shopping malls and investors, with real estate investment trusts (REIT) that hold foreign currency-denominated loans are also expected to have hard times ahead.
Pr vate compan es, not banks
The shoemakers Hotic, Yesil Kundura and Beta, Kasibeyaz restaurants, the listed packaging company Eminis Ambalaj, the pipe manufacturer Dizayn Boru, the jewelry company Gilan and dozens of others have applied for pre-arranged bankruptcy.
Almost every day several other well-known companies face defaults in their credit payments and disclosing their names could create the situation we have expressed in the headline of this article.
However, everybody hears their names. The epidemic seems to have hit a significant number of private companies rather than the banks, as we saw during the 2001 crisis.