Vestel Elektronik offers two-option proposal for $500 million eurobonds

Vestel Elektronik announced that it has initiated an exchange offer and consent solicitation process presenting bondholders with two alternatives in order to restructure its eurobonds with a nominal value of $500 million maturing in 2029.

In a statement made by Vestel Elektronik to the Public Disclosure Platform (KAP), it was stated that two options with differing maturity, interest, and principal repayment conditions were offered to investors for the restructuring of its overseas bonds with an annual interest rate of 9.75% and maturing in 2029. The company noted that it took this step within the scope of efforts to establish a sustainable balance sheet structure.

Under the first option, the maturity of the existing eurobonds, which is May 15, 2029, is envisaged to be extended to May 15, 2035. While no principal haircut is made in this preference, the annual interest rate will be reduced from 9.75% to 4%, and principal repayments will be carried out annually. In the second option, the exchange of investors' holdings for new bonds corresponding to 55% of their nominal value is planned; this implies a 45% principal haircut. An approval application has been submitted to the Capital Markets Board (CMB) for this second option, which includes new eurobonds maturing on May 15, 2032 with an annual interest rate of 6%.

The company emphasized that the transaction does not carry a new borrowing purpose and will not lead to an increase in the total indebtedness level. On the other hand, it was recalled that Financial Restructuring (FR) negotiations conducted with banks for domestic financial debts are ongoing, and it has been proposed to restructure existing debts to mature in 2041 with a two-year grace period on principal and interest payments.