Details of Financial Restructuring
As we had previously announced, in our Board of Directors' Meeting held on December 25, 2002; it was decided to apply to Turkiye Sinai Kalkinma Bankasi A.S (the Financial Restructuring Program Coordination Secretariat), as the Leader Bank for the financial restructuring (Istanbul Approach) of our Bank's receivables from Cukurova Holding A.S. and its companies.
In the first Consortium of Creditor Banks meeting that was held on December 27, 2002; it was concluded that our Bank that is in the same risk group with Cukurova Group companies, can alone continue and finalize restructuring activities, in line with the Article VI / 15 of the Framework Agreement on Financial Restructuring Program.
In our Board of Directors' Meeting held on December 31, 2002; it was decided to sign the Financial Restructuring Agreement with Cukurova Group and the agreement has been signed on the same date.
The terms of such restructuring are as follows: The interest rate has been determined as LIBOR + 3.5. The interest payments will be due annually, at the end of each year. The principal payments will be done semi-annually starting June 2006. The final payment will be done on December 31, 2011. The US$ 268,906,707 immediately payable by Cukurova Group by the terms of the agreement, has been realized in-kind by our Bank acquiring 7 million shares of A-Tel Pazarlama ve Servis Hizmetleri A.S., (corresponding to 50% of its capital) at a value of US$ 269,000,000, based on studies of independent valuation companies.
The following clause has been included in the Financial Restructuring Agreement in line with the decision of BRSA dated December 26, 2002 that has been submitted to our Board of Directors as well as publicly announced:
"If 50% of all kind of debts of the Cukurova Group to the SDIF and Pamukbank are not paid in cash or by transfer of shares of the Group firms on the basis of the evaluations to be made by experienced expert one or two institutions which will be mutually determined by the related parties; and discussions between the Group and Pamukbank/SDIF for reaching an agreement on the repayment protocol concerning the repayment of the remaining amount are not concluded until January 31, 2003, this financial restructuring agreement will be null and void."
As can be understood from this clause, if the Cukurova Group and Pamukbank / SDIF cannot reach a final agreement on the above-mentioned issues by January 31, 2003, the Financial Restructuring Agreement signed between our Bank and Cukurova Group will be considered void.
Yapı Kredi / 02 Jan 2003