(Bloomberg) -- Turkish tycoon Ferit Sahenk’s Dogus Group has signed a deal with creditors to restructure over €1.02 billion ($1.1 billion) in debt tied to its flagship Istanbul cruise port and shopping center project.
The deal is signed for debt provided to Galataport Istanbul Liman Isletmeciligi & Yatirimlari AS and real estate firm Dogus Galataport Gayrimenkul Yatirimlari ve Ticaret AS, banks said in separate exchange filings on Tuesday.
In order to collect a portion of the loans, 49% of the project will be acquired by creditor banks in accordance with their contribution in the original deal. Lenders will grant a repurchase right to Dogus Galataport for three years. Bloomberg reported details of discussions with lenders in October.
Yapi Kredi Bankasi AS will acquire a 13.2% of Galataport, BBVA unit Turkiye Garanti Bankasi AS will take 12.28%, and while Turkiye Is Bankasi AS will hold 7.18%. Turkiye Sinai Kalkinma Bankasi AS will get a 5.23% stake and the Turkish unit of Qatar National Bank will acquire 4.8%. Other creditor in the 2016 loan deal is Ziraat Bankasi AS. The transfer of stakes is expected to be completed by the end of the year.
Galataport, located along a 1.2-kilometer stretch of the Bosphorus, was initially projected to attract 25 million visitors and 1.5 million passengers annually. However, construction delays and Turkey’s economic slowdown have undermined those expectations. The overall project, valued at $2.2 billion by a previous minority investor BLG Capital, has struggled to generate adequate revenue and cash flow since opening in 2021. BLG later sold its stake back to Dogus Group in October.
Once Turkey’s richest man, Sahenk heavily invested in hotels, marinas, and restaurants after selling his stake in Garanti to Spain’s BBVA for around $5 billion. In recent years, Dogus Group, which also owns the Salt Bae restaurant chain, has been offloading assets and renegotiating debts as part of a 2019 restructuring agreement.
(Updates with QNB’s share in fourth paragraph.)
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