Fasten your seatbelts, storm is approaching

Fasten your seatbelts, storm is approaching

It was a whisper among market professionals and businesspeople when one of the biggest sweet and confectionary producers of Turkey, Ülker, the group that also owns Godiva, felt the need to restructure its debt to commercial banks.

It became something else as of the morning of April 10, when the United States dollar hit the benchmark of 4 Turkish Liras.

Turkish government officials, except for President Recep Tayyip Erdoğan, have suddenly stopped bragging about the historic 7% growth rate.

During the incentive allocation ceremony for 23 projects that amount up to 135 billion liras ($33.7 billion), Erdoğan expressed his displeasure on the debate of “overheating.” “Some say 7% growth is not really a good thing. I call them jealous,” he said.

Mehmet Şimşek, who was the target of Erdoğan’s criticisms for the past week, was also present at the ceremony but kept his silence.

Doğuş Group, one of Turkey’s media giants, as well as a leading conglomerate of the automotive, tourism, retail, and construction business, announced it will restructure its $5.8 billion debt. Ülker had asked the same for $6 billion in February. But before the day was over, another big name, former Galatasaray chair Ünal Aysal’s Yeni Elektrik Üretim (New Electric Production) asked for a restructuring of $700 million.

“Once the door opens, everyone wants to jump in. This can become a trend, which can turn into a deadly spiral for banks. We should all really get ready for a hurricane,” said Dr. Artunç Kocabalkan of Integral Investments.

Kocabalkan thinks emerging markets like Turkey could run out of hot cash very soon. Most market watchers think “too big to fail” may be Turkey’s next nightmare, mostly due to global markets but also due to emergency rule.

“Because emergency rule has not been lifted, foreign investors are not buying or getting into partnerships,” said Hüseyin Ersöz, a leading lawyer. “Turkey’s several leading businessmen cannot even leave the country because their passports are in the hands of prosecutors and police. Who can go to Europe or Japan and make borrowing or partnership talks in such an environment?”

Recent debt restructuring stories may just be the tip of the iceberg. Ordinary people have been creating miracles with their minimum wages by rolling over family debt for more than two years. The rich and the mighty have just started to feel the heat. It will be a turbulent flight, so it is time to fasten your seatbelt.

The trial of Sultanbeyli

The Turkish Air Force Academy’s young cadets are on trial again this week. This time, it is 116 of them who were on a bus that stopped at the Sultanbeyli toll station before entering Istanbul on the night of the coup attempt. These young military students and their commanders did not even hesitate to surrender to civilians. They sat on the ground, sang the national anthem, did not use their weapons, waited for the police to come and stayed innocent until the end. Sadly, they are charged with life in prison. It is so heartbreaking to see these young, smart and promising young kids in jail for a crime they did not commit or participate in. I am openly begging our judges to look at the witness accounts, videos, and evidence and to set these students free. It is time for the young eagles to fly again.

Ülker, credit, Turkey