Shares of big four football clubs rise on Turkish stock market following debt restructuring news

Published 08.01.2019 01:56
Updated 08.01.2019 11:45

The shares of four leading Turkish football clubs Fenerbahçe, Galatasaray and Beşiktaş rose more than 5 percent, while Trabzonspor shares were up 4 percent following the news that the debts of these clubs will be restructured.

Turkey's banking association is in talks with the chairmen of the country's top football clubs to restructure their mounting debts, state broadcaster TRT Spor said yesterday.

The total debt of the "Big Four" clubs in Turkey's Super Lig is more than 10 billion lira ($1.87 billion), exacerbated by worsening domestic and international performances.

Turkey's Football Federation (TFF) Chairman Yıldırım Demirören, Turkish Banking Association (TBB) Chairman Hüseyin Aydın and club chairmen met at Ziraat Bank headquarters to discuss terms of the restructuring, TRT Spor said.

It said the clubs were asked to present their income and expense reports to the TBB by the end of January.

"The TBB and consortium partners, which will examine the reports, will set up a separate plan for each club. The proposal to split the debts into five installments will also be evaluated," TRT Spor said.

"All liabilities will be undertaken under the TBB's roof."

It said the clubs were asked to present their income and expense reports by the end of January to the TBB, which would help set up restructuring plans for each club, and that the TBB would evaluate a proposal for the debts to be split into five instalments.

TBB said no single bank would be transferred the debts of the clubs, and instead all banks would continue to manage their own loan risks.

"It is out the question for the debts to be erased or for there to be pricing that is out of market pricing standards in the restructuring," the TBB said, adding that the clubs' incomes could cover their expenditures.

The TFF and TBB chairman are expected to make a statement on the restructuring deal in a television interview on Turkuvaz Medya's sports channel Aspor later yesterday. According to the restructuring plan, he plan bans football clubs from reckless spending. Accordingly, the clubs subjected to financial rehabilitation will spend money in line with their balance of income and expenditures.

The receivables of the public sector and banks will be deducted from the broadcasting, sponsorship and Passolig - a compulsory card for fans who want to buy tickets and watch games at stadiums - revenues of debt-ridden clubs, while the remaining money will be given to clubs for spending.

According to the new plan, in the first stage, football clubs in the Super League will submit their balance sheets to the TFF and the Banks Association until Jan. 31. Later, club debts will be restructured. Restructuring rules will be introduced according to the financial structure of each club, with repayment options such as five years, two years, two years non-refundable and five years d

eferred, in an attempt to relieve clubs.

In the second stage of the plan, the clubs that cannot cover their expenses with their income and that try to close the annual gap through borrowing will be under strict control. The federation will set rules for the control of expenditures by ensuring financial discipline. Sanctions will be imposed on the clubs that violate the rules.

Fenerbahce, a regular contender for the league title in previous years, sit in 17th place with just 16 points from the first half of the season. The club has debts of nearly 4 billion lira.

Their bitter rivals and Turkish football's most decorated club, Galatasaray, are fifth and have been eliminated from the UEFA Champions League.

The club, which says that its debt stood at 2.97 billion lira at the end of September, spent 7.5 million euros in June to sign Brazilian centre back Maicon, who has made just nine starts in the league this season.

Besiktas, who went on a spending spree that its chairman dubbed "Sacrifice" in recent years, are 2.49 billion lira in debt and lie seventh in the table.

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