(Bloomberg) -- Turkish billionaire Ferit Sahenk’s Dogus Holding AS will this week start talks with a dozen local lenders to restructure about 40 percent of its outstanding borrowings, people with knowledge of the matter said.
The group, which owns restaurant chains including Zuma and Nusr-Et -- known for its founder chef’s meme “Salt Bae” -- is negotiating debt of as much as $2.5 billion, said the people, who asked not to be identified because the deliberations are private.
Dogus is seeking to extend the average maturity of the debt with new loans that will fall due in about 5 1/2 years, compared with an average maturity now of 2 1/2 years, said the people. The company is also pushing to skip principal payments for the next two years to make payments only on the interest, the people said.
About 80 percent of the collateral for the restructured loans will be covered by the company’s assets, including hotels in Spain, which could be sold and turned to cash if needed, one of the people said. Dogus Holding declined to comment.
Sahenk, once Turkey’s richest man, spent heavily on restaurants, marinas and hotels in Turkey and abroad after selling his 31 percent stake in Turkiye Garanti Bankasi AS to Banco Bilbao Vizcaya Argentaria SA for almost $5.5 billion in three stages since 2010. One of Dogus’s biggest investments is the $1.5 billion development of Galataport, a cruise port and a compound of shopping malls on the Bosporus in central Istanbul.
Dogus Otomotiv Servis ve Ticaret AS, the group’s unit distributing Volkswagen AG brands in Turkey, rose as much as 2 percent to 7.6 liras, the highest in a week. Dogus Gayrimenkul Yatirim Ortakligi AS, Sahenk’s real estate investment trust, rose as much as 3.2 percent to 2.88 liras.
Sahenk’s group’s had outstanding loans of 23.5 billion liras ($5.7 billion) as of the end of December, according to its website, up from 21.2 billion liras a year ago. The Istanbul-based company will have to make repayments of 7.7 billion liras this year and 4.9 billion liras next year. The group made principal payments of 7.1 billion liras in 2017 against new borrowings of 8.3 billion liras in the same period.
The management of Dogus Oto, which had 2.7 billion liras of debt at the end of 2017, is “planning to extend the maturity of the loans via alternative funding sources in 2018 and is looking at other measures to reduce the overall debt,” Toygun Onaran, an analyst at Oyak Securities in Istanbul, said in an emailed note on March 30.
Dogus has been disposing of assets to cut debt. Last week, it agreed to sell 17 percent of d.ream International BV, which owns restaurant brands including Azumi and Nusr-Et, for $200 million to Singapore state’s investment firm Temasek Holdings Pte Ltd. and London-based Metric Capital Partners LLP. An initial public offering of d.ream is also in the cards, possibly in 2019, people with knowledge of the plans have said. Dogus’s wider restaurant business is grouped under d.ream, which also has brands such as Da Mario, Fenix, Coya, Gina and Gunaydin.
Dogus has also sold its stake in a joint venture to build a shopping mall in Izmir, western Turkey, to its partner Orjin Group. The European Bank for Reconstruction and Development is also considering a 70 million euros ($87 million) investment in the group’s D-Marinas BV, which has 10 marinas in Turkey, Greece and Croatia.
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