Even Giant Companies Are Chasing Debt Extensions in Turkey

In today’s tight economic climate, it’s not just individuals and small businesses feeling the pressure — even Turkey’s largest corporations are knocking on banks’ doors to restructure their debts and extend maturities. As rising interest rates, limited credit access, and high inflation squeeze all corners of the economy, staying liquid has become more of a priority than paying off loans.

Liquidity Over Repayment: Everyone’s Strategy Now

According to insiders in the banking sector, a clear trend has emerged: whether individuals, SMEs, or major corporations, no one wants to repay their debts right now. Instead, the focus is on preserving cash flow. Even big-name firms — long considered financially robust — are seeking restructuring deals with banks, with a particular emphasis on extending loan terms.

Although the Central Bank recently initiated a rate-cutting cycle in July, it hasn’t yet relaxed credit restrictions. These lending caps, combined with high interest rates, have severely limited access to financing. SMEs, in particular, have maxed out their limits, and their financials often don’t support new credit. While the banking regulator (BDDK) has eased rules for individual loan and credit card restructuring, it hasn’t done the same for commercial loans — though banks are reportedly working independently to meet corporate restructuring needs.

Banks Are Willing, Risking a Domino Effect

Sources from the banking sector confirm that restructuring requests are flooding in. They emphasize that holding onto cash is strategically more valuable than making debt payments, especially with the uncertainty in the market. Banks aren’t turning away big clients either — in fact, they’re cautious about rejecting restructuring requests from large corporations due to the potential ripple effects across the economy. If a major company were to default or suffer serious financial damage, it could trigger systemic risks that no institution wants to be responsible for.

One prominent example is Zorlu Holding. In late May, it made headlines for restructuring its short-term lira-denominated debt — reportedly $1.3 billion — into long-term Euro-based loans with maturities extending up to 15 years. On top of that, the company secured an additional €500 million (around $564 million) in financing to protect against market volatility. This move dropped its short-term debt share from 60% to 40% of total liabilities.

Ripple Effect: More Big Names Seek Restructuring

Zorlu’s strategy has inspired other large holding companies to pursue similar debt restructuring talks. One source noted that the banks are essentially obligated to accommodate these requests, given the broad economic consequences of a major corporate failure. Refusing to restructure such debt could lead to cascading risks throughout the financial system.

Another source added that, while there hasn’t been a flood of restructuring requests from big corporations just yet, some major firms are actively in discussions. Extending maturities is currently the top demand in these negotiations, though in some cases, actual debt reductions are also being considered.

Restructuring Volumes on the Rise

Data from the Turkish Banks Association (TBB) shows that official financial restructuring agreements under the FYY framework remain limited — just four such agreements were made in June 2025 for companies with debts exceeding 100 million TL. These deals amounted to 849 million TL. But more notable was the restructuring of over 6 billion TL in debt by a single energy company in the same month.

In total, 12.6 billion TL in debt was restructured during the first half of 2025 — a massive increase compared to just 836 million TL in the same period of 2024. The actual number is likely even higher, as many restructuring deals happen outside the FYY framework, on banks’ own initiative. According to March 2025 data, the total amount of restructured or rescheduled loans across the banking system has reached approximately 814.6 billion TL.

Fitch Sounds the Alarm on Corporate Liquidity

International credit rating agency Fitch Ratings also weighed in last week, warning that Turkish industrial firms will continue to face credit pressure throughout 2025. The report highlights several risks: sluggish economic growth, tough credit conditions, rising costs due to imported raw materials and foreign currency debt, and the ongoing struggle with inflation. Companies like Arçelik and Vestel, which rely heavily on exports, are having a hard time passing rising costs onto consumers.

Fitch also stressed that the unpredictable nature of Turkey’s monetary and fiscal policy makes it difficult for businesses to plan ahead, further increasing financial volatility.

Looking Ahead

All signs point to a growing dependence on debt restructuring as a survival strategy — not just for struggling firms, but even for industry giants. With access to new credit limited and repayment pressure high, even the most established players are playing it safe and holding onto liquidity wherever they can. Whether this trend will stabilize the corporate landscape or merely delay larger problems remains to be seen. One thing is clear, though: debt dynamics in Turkey are shifting — and fast.

ekonomim – by Şebnem Turhan (translated summary)