Turkey’s Zorlu to cut jobs and sell assets

Zorlu Holding, one of Turkey’s largest industrial groups, is selling assets and letting go of least 10 percent of its staff to help meet its debt obligations, Bloomberg reported.

The Istanbul-based group, which operates in real estate, energy and manufacturing, has nearly $5 billion in outstanding loans and has already extended some of its loan maturities, Bloomberg reported, citing only ‘informed’ sources.

As part of the cost-cutting efforts, Zorlu’s Vestel Elektronik – its flagship company making home appliances and electronics – plans to lay off 2,000 employees, or 10 percent of its total workforce, Bloomberg said.

In 2022, the year for which the latest data is publicly available, the company employed 36,000 staff and reported revenue of $9.3 billion.

The restructuring comes as Turkish companies grapple with Turkish lira financing costs exceeding 60 percent, driven by relatively high central bank interest rates designed to curb double-digit inflation.

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Zorlu CEO Ömer Yüngül has acknowledged the impact of higher borrowing costs, but said that the company faces “no debt repayment issues”. He confirmed the Vestel job cuts.

Zorlu has refinanced short-term, lira-denominated debt of $1.3 billion into longer-dated euro-denominated loans with maturities of up to 15 years, Bloomberg said. The company’s ratio of short-term to total debt has fallen from 60 percent to 40 percent.

In addition, the group secured €500 million ($564 million) in new financing.