Turkey’s Yapi Merkezi is in talks with banks to restructure around $1 billion of loans, after a row over payments for a project in Tanzania hit the construction company’s cash flow, people familiar with the matter said, write Asli Kandemir and Kerim Karakaya of Bloomberg, in a great inside scoop.
The Istanbul-based contractor, which used the loans to build hundreds of kilometers of railways in the East African country, owes lenders around $3.2 billion, said the people, asking not to be identified as the negotiations are private. A bulk of the loans it wants to restructure was taken out from state-owned lenders in Turkey, they said.
Yapi Merkezi declined to comment.
In December 2021, Yapi Merkezi signed a $1.9 billion contract with the Tanzanian government to design and build 368 kilometers (229 miles) of rail network, followed by a 2022 deal to build another 165-kilometer line. Tanzania’s public auditor earlier this year criticized the terms of a loan agreement between the Tanzanian government and Standard Chartered Plc, which the watchdog said made the funds available on condition that Yapi Merkezi was hired for the job.
A wave of debt restructuring hit Turkish corporates after a currency crash in 2018, affecting tens of billions of dollars of credit repayments. Coronavirus lockdowns starting in 2020 resulted in a second wave, as falling demand hit companies.
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