Godiva owner in talks with Turkish banks to reorganise loans

Yildiz Holding met with lenders following preliminary 2017 earnings and 2018 projections

19:11 February 9, 2018

ISTANBUL: Yildiz Holding AS, the global sweets company owned by Turkey’s richest man, said it’s in talks with banks to consolidate loans in its home country and to refinance the debt to keep the company’s growth path intact.

Yildiz Holding met with lenders following preliminary 2017 earnings and 2018 projections, it said in an emailed statement after Bloomberg reported it was seeking to restructure debt with 10 banks. The lenders, led by Yapi & Kredi Bankasi AS, a unit of Turkey’s Koc Holding AS and Italy’s UniCredit SpA, offered to consolidate Yildiz’s separate loans and refinance them through a new syndicated loan, the firm said.

Yildiz, owned by Murat Ulker, is one of Turkey’s largest companies and has been on a global buying spree over the past decade or so, snapping up assets including Belgium’s Godiva Chocolates, the UK’s United Biscuits Holdings Plc and DeMet’s Candy Co of the US. The loans it’s seeking to restructure include debt it took on for the $3.1 billion (Dh11.37 billion) purchase of United Biscuits in 2014, according to people familiar with the negotiations, who asked not to be named because the talks are private.

Shares slump

Yildiz Holding is pushing an expansion abroad on what it says are growth opportunities in the Middle East, North America, Africa and Asia. After a July 2016 coup attempt in Turkey, the company came under repeated fire in pro-government newspaper reports, which implied that it was involved in financing businesses connected to the coup. Those claims were rejected by its chairman, Ulker.

Ulker Biskuvi Sanayi AS, the group’s largest listed unit in Turkey, slumped as much as 3.4 per cent before paring declines to trade one per cent down at 22.52 liras as of 12:03pm in Istanbul. Gozde Girisim Sermayesi Yatirim Ortakligi AS, Yildiz’s private-equity unit, dropped as much as 5 per cent to 5.11 liras. Yapi Kredi slid as much as 2.4 per cent as most stocks in the 13-member Borsa Istanbul Banks Index dropped.

Investors perceive news of the loan restructuring as “a potentially negative sign” even though the group is saying it wants to consolidate its debt, said Can Oksun, a trader at Istanbul-based Global Securities. “But the underperformance of group stocks is relatively muted and their trading has been orderly, with no panic selling.”

Ulker reported $1.2 billion in outstanding debt in its latest filing, in the third quarter of 2017, according to data compiled by Bloomberg. Yildiz has requested that the banks extend maturities on its loans and offer it a three-year grace period before payments begin, according to four people with direct knowledge of the matter.