ANKARA (Reuters) - Turkey’s banking association said on Friday that the restructuring of the mounting debts of the country’s top football clubs was moving forward, adding that the debts would be matured for five years, with two years without paying the principal on the loans.
In January, the Turkish banking Association (TBB) said Turkey’s top football clubs, such as Fenerbahce and Galatasaray, will have their debts restructured but not written off, in a move to ease their spiralling debts.
In a statement on Friday, the TBB said there would be “no erasing of debts or pricing beyond market norms. The financial liabilities subject to restructuring will be matured for a total of five years, with two years of non-refundable principal.”
“It is not possible to transfer the debts of football clubs to a bank, and each bank will continue to manage its own credit risk,” it added.
Like many Turkish businesses which took large foreign currency loans, clubs have also suffered from a currency crisis that saw Turkey’s lira lose almost 30 percent of its value against the dollar in 2018.
The “Big Four” clubs - which also include Besiktas and Trabzonspor - have spent heavily to attract foreign stars. Poor domestic and international results have exacerbated the debts they have amassed.
As the clubs struggle with their debts, which have racked up to more than 10 billion lira (1 billion pounds), they have started to offload valuable players to alleviate some of the financial burdens - putting the teams under more pressure on the pitch.
Reporting by Ebru Tuncay and Tuvan Gumrukcu, editing by Louise Heavens