Zorlu Holding, one of Turkey’s largest business groups, has launched a major restructuring plan that includes selling assets and cutting jobs as it works to manage a $4.9 billion debt burden, Bloomberg reported.
The İstanbul-based company will lay off 2,000 workers, about 10 percent of the staff at its electronics division, Vestel Elektronik, and sell off parts of its business. It is also refinancing debt and looking to stabilize its finances after a steep drop in earnings.
Zorlu CEO Ömer Yüngül said in an interview with Bloomberg HT that the layoffs are aimed at making operations more efficient and that production won’t be affected. He said capacity is expected to increase.
But Vestel’s recent financial results show serious problems. In the first quarter of 2025, the company posted a net loss of 5.08 billion Turkish lira ($157 million), up sharply from a 298 million lira loss in the same period last year. Revenue dropped by 14 percent and operating profit fell 45 percent. Vestel’s share price has dropped more than 40 percent since January.
In April, Moody’s credit rating agency downgraded Vestel’s long-term rating from B3 to Caa1, both considered non-investment grade. The lower rating means the company is seen as having a higher risk of default. Moody’s also warned that Vestel’s cash flow is expected to stay negative for the next two to three years.
To reduce financial pressure, Zorlu has converted about $1.3 billion of its short-term Turkish lira debt into euro loans that won’t come due for up to 15 years. It also raised another €500 million in funding. These steps lowered its short-term debt from 60 percent to 40 percent, according to Bloomberg, which described the effort as one of the biggest corporate debt restructurings in Turkish history.
Zorlu is also selling off assets to raise cash. It plans to sell its 25 percent stake in Dorad Energy, a natural gas power company in Israel. That move follows its energy company’s decision earlier this year to exit fossil fuel projects. The sale, which is still awaiting approval, would transfer shares to the Israeli investment firm Phoenix Group.
The company may also sell real estate, including parts of the Zorlu Center in İstanbul, a large complex with a luxury shopping mall and other properties. Analysts say selling these assets could help Zorlu focus on its main businesses, though they question the company’s long-term strategy.
Zorlu’s financial reports show signs of stress. In the first quarter of 2025, its energy arm reported a loss of 3.3 billion lira. The group’s total assets stood at about 130 billion lira, while its debt grew to 67.6 billion. The company also reported a drop in equity due to inflation, a weak Turkish lira, and higher costs.
The group is also facing outside challenges. High inflation, rising interest rates and weak demand in European markets have all hurt business. Political uncertainty, especially after the arrest of İstanbul’s opposition mayor, Ekrem İmamoğlu, in March, has made foreign investors more cautious.
While job cuts and asset sales may help in the short term, analysts say Zorlu needs to invest in high-tech and high-value industries to ensure long-term growth.