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Zorlu Initiates Job cuts and Asset Sales Measures to Manage $4.9bn Debt
May 21, 2025
Turkish conglomerate Zorlu Holding has initiated measures such as asset divestments and a workforce reduction to manage its large $4.9bn debt burden. This plan is being implemented amid challenging economic conditions that have seen yields rise with persistent inflation. Vestel Elektronik, Zorlu’s home-appliance manufacturer, intends to reduce its workforce by approximately 2,000 employees (10% of its total staff). The group has also proactively refinanced ~$1.3bn of short-term debt into longer-dated euro loans and has secured an additional €500mn in financing. These financial steps have reportedly lowered Zorlu’s short-term debt ratio from 60% to 40%. The approach follows Moody’s downgrading Vestel Elektronik deeper into junk territory in April (to Caa1 from B3), citing concerns over liquidity and operational performance. However, Zorlu’s CEO maintained that there were no issues with current debt repayments.
Zorlu’s 11% dollar bond due 2030 has fallen by over 13% since March and currently trades at 89.7 cents on the dollar, yielding 14%.
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