Shutterstock/ Murat An
The restructured debt will have a maturity of as much as 10 years.
Monday 07, January 2019
(Bloomberg) --Soccer is the latest Turkish industry to face a large-scale debt revamp after the country’s top teams suffered money-losing seasons and borrowed heavily to buy marquee players.
Turkey’s banking association and soccer federation are preparing to announce a restructuring plan for about TRL 11 billion liras ($2 billion) of debt held by the nation’s soccer teams after reaching an agreement Friday. Shares of the country’s four listed clubs surged.
The decision was made at a meeting between Turkish Football Federation President Yildirim Demiroren, banking association head Huseyin Aydin and executives of Super League soccer clubs, Demiroren News Agency reported.
Soccer clubs’ debts will not be erased or restructured at a discount to market prices, the banking association said in an emailed statement on Monday. The plan aims to strengthen the financial structure of clubs and introduce strict fiscal criteria.
Banks will draw up separate plans for each club and the football federation will supervise the teams’ finances after the deal, Husnu Gureli, the Turkish Football Federation’s acting chairman for finance, legal and licencing, was quoted as saying on the Bloomberg website.
Spending on high-profile players and opaque ownership structures have some of the clubs saddled with high debts in Turkey’s 18-team top league. Pressure had been growing on the government to support and monitor soccer clubs in a country that is fanatic about the game and run by President Recep Tayyip Erdogan, who was a semi-professional soccer player in his youth.
Turkish lenders have already restructured around $20 billion of debt after the lira dropped 28 per cent against the dollar last year, making it one of the world’s worst-performing currencies, and hurting firms’ ability to repay foreign-currency loans.