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846 Turkish firms have applied for debt restructuring to date: minister

Commerce Minister Ruhsar Pekcan has announced that applications from 846 Turkish companies for konkordato, a legal process for restructuring debt, have been accepted so far, the Diken news website reported on Thursday.

Pekcan gave details of the firms in budget hearings in parliament on Thursday.

Konkordato is regulated under the enforcement and bankruptcy section of the Turkish Commercial Code. Declaring that it cannot pay its debts, a firm can apply to a court for konkordato, and the court starts the process of restructuring debt under specific regulations. The firm needs to present a sound payment plan to the court.

Some economists liken konkordato to putting the firm in an oxygen tent.

In March, during a now-ended state of emergency, a government decree revoking the suspension of bankruptcy was issued, after which firms started to apply for konkordato instead.

Last week a regulation rendering the konkordato process more difficult was passed in parliament.

According to an economy columnist from the Sözcü daily, the applications of 3,000 firms for konkordato were approved by the courts, and at the end of this year the number will have climbed to 7,000. The list includes construction companies, logistics firms, food retailers and textile manufacturers.

Most of the firms that have applied for debt restructuring have been operating in the construction sector.

Many economists believe the Turkish economy has been experiencing a recession after the national currency lost some 30 percent of its value against the US dollar this year.

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