October 14, 2019 / 11:24 AM / 4 months ago

UPDATE 1-Turkish bank group launches loan restructuring plan for companies

(Adds details of programme, background)

ISTANBUL, Oct 14 (Reuters) - Turkey’s banking association said on Monday it would launch a restructuring programme for companies with more than 25 million lira ($4.23 million) debt to banks, as authorities continue to support companies hit by last year’s currency crisis.

Turkish companies were burdened with heavy foreign-currency debt following a currency crisis last year that sliced 30% off the value of the lira and drove the economy into recession.

The new regulation targets relief for companies that intended to pay debts but could not because their income-expense balance was damaged, the TBB banking association said in a statement.

It added that bankrupt companies would not be able to benefit from the programme, and that approval was pending for extending the programme to smaller companies.

Following the currency crisis last year, banks signed a “loan restructuring framework agreement” aiming to restructure loans over 100 million lira.

TBB said it would announce the companies that sign the framework agreement with the lenders.

Turkey’s banking sector’s total loans stood at 2.5 trillion lira as of August, more than 100 billion lira of which has been re-structured including the Yildiz and Dogus Holding loans. ($1 = 5.9055 liras) (Reporting by Ebru Tuncay; Editing by Jonathan Spicer)

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