Vestel launches dual-option restructuring for $500 million eurobond

Vestel Elektronik has initiated an exchange offer and consent solicitation process presenting bondholders with two alternatives to restructure its $500 million nominal value eurobonds bearing 9.75% interest and maturing in 2029. The company disclosed the announcement to the Public Disclosure Platform (KAP).

Under the first option, no principal reduction will be applied; maturity will be extended from 15 May 2029 to 15 May 2035, and annual interest will be reduced from 9.75% to 4%. Principal repayments will be made annually.

In the second option, investors will accept new securities equivalent to 55% of the nominal value of their current bonds; this represents a 45% principal haircut. The new bonds will carry annual interest of 6% and mature on 15 May 2032. Vestel announced it will submit an approval application to the Capital Markets Board (SPK) since the second option requires a new eurobond issuance.

In the same announcement, the company noted that domestic debt negotiations with banks continue under the Financial Restructuring framework under Article 32 (temporary) of Law No. 5411 on Banking, and that in these discussions a proposal for extension to 2041 maturity with a two-year principal and interest payment holiday remains on the table. For the eurobond restructuring to become effective, an extraordinary resolution must be passed at a bondholders' meeting, transaction conditions must be satisfied, and SPK approval must be obtained.