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Turkish electronics maker Vestel on Tuesday unveiled a restructuring plan for $500 million in outstanding bonds, offering investors a choice between taking a 45% cut to their principal or extending repayment by six years as it seeks to shore up its debt-burdened balance sheet.
The overseas bonds (ISINs: XS2817919587 and US92548MAA53), listed on the Irish Stock Exchange, carry an annual interest rate of 9.75% and mature in 2029. Under the proposal, investors can retain their full principal by extending the maturity date from May 15, 2029, to May 15, 2035, or exchange their holdings for new bonds due in 2032 worth 55% of the original principal.
The first option lowers the annual interest rate to 4% while preserving the full principal, while the second offers new bonds paying 6% annually.
Vestel will seek approval from Türkiye's Capital Markets Board (CMB) to issue the new 2032 bonds, maintaining that the deal will not increase its overall debt burden.
Bondholders will vote on the proposal at an online meeting at 10 a.m. London time on Nov. 11, 2026. Voting instructions are due by 4 p.m. London time on Nov. 6.
Vestel first issued the bonds in May 2024, raising $450 million through five-year notes carrying a 9.75% annual coupon and maturing on May 15, 2029. It issued an additional $50 million in June 2024, bringing the total principal to $500 million.
The bonds now trade at 24.6% of face value, while their yield to maturity has climbed to 88.2%, reflecting the steep discount at which investors are trading the debt.
At the current price, investors who bought at face value face an unrealized loss of 75.4%, excluding coupon payments and transaction costs.
Alongside the bond exchange, Vestel is negotiating with domestic creditor banks to restructure its existing financial obligations. The company has proposed extending bank debt maturities to 2041, with a two-year grace period during which neither principal nor interest payments would be required.
Negotiations with participating banks remain ongoing, and the proposed arrangement is separate from the eurobond restructuring and has yet to be finalized, the company said.
Vestel, which employs nearly 16,000 people across 31 companies, has faced weak export demand, intensifying competition in its television and home appliance businesses, and rising production costs in recent years.
At the end of the first half of 2026, Vestel reported net financial debt of ₺106.1 billion ($2.1 billion), total liabilities of ₺172.4 billion and cash holdings of ₺2.3 billion. Its net loss reached ₺10.3 billion, as revenue fell 47.8% year over year to ₺46.9 billion and gross profit dropped to ₺6.3 billion from ₺15.2 billion a year earlier.
The restructuring efforts aim to put the company’s finances on a more sustainable footing and support continued operations amid mounting financial pressure.
Vestel has also launched a turnaround program focused on improving profitability, reducing costs, streamlining production and strengthening cash generation.
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