Turkish Power Producer Seeks Lower Rates on $3.9 Billion of Debt
Turkish Power Producer Seeks Lower Rates on $3.9 Billion of Debt
(Bloomberg) -- A Turkish energy producer and distributor started preliminary talks with lenders to renegotiate interest rates on $3.9 billion of debt to try and benefit from lower borrowing costs.
Bereket Enerji approached nine lenders about adjusting rates on debt that had previously been restructured, people with knowledge of the matter said. Some banks are reluctant to meet the demand, while others are more sympathetic, the people said, asking not to be identified as the deliberations are confidential.
Negotiations are continuing, they said. Denizli, Turkey-based Bereket Enerji, owned by businessman Ceyhan Saldanli, declined to comment.
While Turkey last month raised interest rates for the first time since a currency crisis in 2018, the central bank had cut borrowing costs by 1,575 basis points until June. Globally, interest rates have also dropped in the wake of the coronavirus outbreak, with the fallout from the pandemic adding to demand from Turkish companies to restructure tens of billions of dollars of debt.
Bereket Enerji restructured nearly 280 of mostly long-term loans in 2019 totaling about $5 billion, and simplified them into five major loan packages. A depreciation in the lira resulted in the company converting about a third of its foreign-currency loans into liras.
The weighted average interest rate on commercial loans plunged to 9.3% in July from almost 36% during the currency crisis two years ago, when they were at the highest since at least 2003. The rates are currently at 15.4%.
©2020 Bloomberg L.P.