The latest picture on the concordats in Turkey

The latest picture on the concordats in Turkey

The number of companies declaring concordat decreased in February, a trend also observed in January. Some 126 companies declared concordat in February, making the total number of companies declaring concordat in the first two months of this year 404.

The total number of companies to have declared concordat in the 14 months since the beginning of 2018 stands at 1,953.

As stated by Treasury and Finance Minister Berat Albayrak, the numbers of the first month of this year are half of the numbers of last year’s final months. Last November 507 and last December 453 companies declared concordat. This number decreased to 278 in January and 126 in February. Scrutinizing the data on concordats, it appears that there is no change in terms of the sectors and the provinces where companies have declared concordat. Of the 1,549 concordats in 2018, 695 were limited liability companies. In the last two months, 165 limited companies have declared concordat. Last year, 333 joint stock companies declared concordat and the number for this year’s first two months stands at 75.

Last year 477 companies in Istanbul declared concordat. This year Istanbul, again, tops the list with 125. Ankara was second last year and İzmir third. The same pattern applies for this year.

Where do they go?

As declaring concordat has become more difficult, a drop in the numbers was being expected. Yet there was an expectation that companies whose requests for concordat were turned down or those who could not prolong their concordat period would slide towards bankruptcy.

For the companies preparing to declare concordat or those who could not prolong their periods, there is an effort to reconstruct their credits to the banks by forcing a little bit the banks and also by giving diverse governmental incentives. Due to non-returning credits, this method suits the banks and it seems this way an explosion of bankruptcies is being prevented.

Albayrak said 318 companies came out of the concordat process, and therefore 5.4 billion liras worth of credit was no longer under the concordat process.

The banks set up teams to work jointly on this issue, according to Albayrak, who said the positive performance on the economy has also reflected itself onto this process.

In the last quarter of 2018, seven big banks started restructuring the credit debts of the companies under concordat, and with the addition of new banks the team is talking to hundreds of companies, said Albayrak.

Albayrak said that in March and April 4.5 billion liras of credit is expected to be restructured and by the end of April the total amount of credit to come out of the concordat process will reach 10 billion liras. The number of companies that went to bankruptcy from concordat is unknown. I have seen that in the first two months of this year the request of 105 companies for a prolongation were turned down.

I do not think that a big majority of them reached a compromise on their credit with the banks. I do not know whether there are companies that go on to work after they came out of concordat. The process of concordat improves data. But the bankruptcies remain unknown.



Erdal Sağlam, Turkish economy, Turkish companies,