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Dec 13 2018

Turkish firms under bankruptcy protection more than double

The number of Turkish firms declaring bankruptcy protection more than doubled in a month, figures provided by Trade Minister Ruhsar Pekcan indicated.

Replying to parliamentary questions, Pekcan said that the total of limited and joint stock companies who have secured protection from creditors was 846, Dünya newspaper reported on Thursday. She didn't provide a time period. Pekcan had put the total at 356 firms in a statement on Nov. 10, without giving a breakdown on company type.

Istanbul saw the largest number of declarations with a total of 282, Pekcan said. The number had stood at 132 a month ago. Ankara was placed second with 115 firms, up from 50 previously.

Some Turkish firms are struggling to make ends meet after a currency crisis ripped through the economy earlier this year, pushing interest rates on debt to the highest level in 15 years and making foreign loans more difficult to repay. The lira has lost about a third of its value this year, pushing producer price inflation to more than 40 percent.

Bankruptcy protection, granted by the nation’s courts, allows firms to continue operating despite calls on debt by creditors. The courts usually grant companies a stay from bankruptcy of three months, appointing officials to their executive boards, before reviewing cases in further hearings.

Analysts are concerned that a protracted economic downturn and currency volatility in Turkey will see many firms collapse, hurting economic growth and the balance sheets of the nation’s banks.