Wealth Management

Turkish banks and investors disagree on bad loan talks

Turkish Banks ATMs/Bloomberg

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The deadlock between potential buyers, including Goldman Sachs Group and Bain Capital, involved the price and structure of any transaction.

Thursday 16, May 2019

(Bloomberg) –Turkish lenders disagreed on almost everything with potential investors when they met for the first round of talks about unloading a pile of bad loans.

Investors demanded a 30 per cent discount on the face value of the loans and an ownership stake in the lenders and for their part, the Turkish banks refused to write-off the loans and instead wanted to restructure them.

The meeting, organised by PwC, was the first such gathering since Treasury and Finance Minister Berat Albayrak unveiled plans last month to carve out non-performing energy and real-estate loans.

The debt would then be transferred to two funds that will be run by banks as well as local and international investors.

Attendees are said to have even disagreed on the definition of a non-performing loan, the meeting was at a working level and discussions were preliminary.

While the plan to clear up the banks’ books is a key part of government plans to bolster a weakened financial system, some of the participants questioned whether there would even be more talks.

Bank capital ratios are being squeezed after companies requested about $28 billion of debt-restructurings after a 28 per cent plunge in the lira against the dollar last year.

 

TAGS : NLPs, Bad loans, Turkish banks, Goldman Sachs, Bain Capital, PwC, Berat Albayrak

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