Turkey's Vestel details turnaround plan as debt restructuring talks continue

By Reuters News

Oct 22 (Reuters) - Turkey's Vestel Elektronik VESTL.IS told eurobond holders on Thursday it plans to shift towards higher-margin products and away from lower-return businesses as part of efforts to improve profitability while pursuing a debt restructuring.

  • In a presentation published on its website, the electronics maker said it would overhaul its business model to focus on value-added products as it struggles to compete with lower-cost Asian rivals

  • The company this week offered holders of its $500 million eurobond due 2029 two restructuring options. The first would extend the maturity to 2035 with no reduction in principal, while the second would exchange the bonds for new notes due 2032 at 55 cents on the dollar

  • Vestel has been unable to fully pass on inflation-driven cost increases because of competition from low-cost Asian manufacturers, while softer demand in Europe has also weighed on performance

  • Rising labor costs in Turkey and the lira's slow depreciation has squeezed margins

  • Its core profit (EBITDA) margin dropped to negative 3.3% in the 12 months to the end of the first half of 2026 from 16.9% in 2021

  • The company said it would prioritise improving the efficiency of existing capacity

  • It also plans to exit products and markets that do not generate sustainable returns and reduce its exposure to consumer electronics

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