Companies left behind a difficult year with the trade tensions between China and America, as well as the worldwide economic contraction and fluctuations in exchange rates.

With the Financial Restructuring (FYY) application put into effect by the Banks Association of Turkey, companies will be able to restructure their loan debts without declaring a concordat.

With the Financial Restructuring (FYY) application put into effect by the Banks Association of Turkey (TBB), companies will be able to restructure their debts without declaring a concordat. Large-scale companies with a debt of 25 million TL or more to banks and financial institutions will be able to directly benefit from this application. Companies with loan debts under 25 million TL will only be included in the application after the necessary approvals. Companies that have a final bankruptcy decision

It will not be able to benefit from the Financial Restructuring application. With the application, debts will be secured against bankruptcy, and the domino effect will be prevented by affecting the creditors financially. The longest maturity for the restructuring period of debts under 25 million TL will be 60 months. A principal and interest-free period of up to 12 months can be granted. Payment frequencies will vary according to sectors.

“RESTRUCTURING WILL DIRECTLY AFFECT PRODUCTION, INVESTMENT AND EMPLOYMENT”
Stating that the new application will enable debtor companies to fulfill their repayment obligations and continue their production, investment and employment activities, Mustafa Köksoya said, “Financial Restructuring is of vital importance for companies to fulfill their obligations.

This application will be beneficial for debtor companies as well as collection companies in order to continue their existence.

Thus, economic growth will be supported and serious losses can be prevented. With the FYY implementation, which came into force with the Temporary Article 32 of the Banking Law No. 5411, banks, financial leasing companies, factoring companies and companies that owe loans to financing companies will be able to fulfill their payment obligations with the measures to be taken within the scope of agreements and contracts.

“NEGATIVE PERCEPTION OF THE CONCORDATON WILL REMOVE”
Stating that companies should keep their financial processes under strict control since the establishment stage, Mustafa Köksoya said, “For companies to continue their existence, there should be a system in which the income-expenditure balance is set up correctly and the payments and receivables are managed effectively. Companies whose financial structure has deteriorated must manage the process extremely well. There was a negative public perception towards companies that were already trying to ensure financial discipline by declaring concordat.

With the implementation of Financial Restructuring, this perception will be eliminated and fiscal discipline will be ensured.

Source: Concordat vanishes, Financial Restructuring is coming