Concordat or Financial Restructuring? Choosing a Path in Türkiye

A company struggling with debt in Türkiye usually has two main paths: agree directly with creditors, or apply for concordat (konkordato).

Both aim for the same thing: keep the company running and pay its debts. But how they work, what they cost and what they lead to are very different.

Choosing the wrong one can cost time, money and, most importantly, creditor trust.

The Two Paths in Brief

Financial Restructuring means renegotiating maturities, interest and collateral with banks and other creditors out of court.

Concordat is a court-supervised procedure under the Turkish Enforcement and Bankruptcy Law. The company submits a project, creditors vote and the court confirms.

Comparison

	Restructuring	Concordat
Nature	Out-of-court negotiation	Statutory, court-supervised procedure
Binding on	Only creditors who agree	Generally all creditors once confirmed
Enforcement proceedings	Not automatically stopped	Generally suspended by the moratorium
Confidentiality	Can be kept confidential	Publicly announced
Duration	Usually a few months	Can exceed a year including moratoria
Cost	Lower	Independent audit, commissioner and court costs
Management	Stays with the company	Under commissioner supervision

When Restructuring Makes Sense

• Few creditors, with most debt concentrated in a few banks
• No enforcement proceedings yet
• Reputation and supplier relationships are a priority
• The problem stems from a temporary cash squeeze

Here, an out-of-court deal is faster and less damaging.

When Concordat Makes Sense

• Many creditors and no way to agree with each individually
• Enforcement has started or is imminent
• Some creditors refuse to settle
• The business can generate enough cash to pay its debts if it keeps operating

Concordat’s main strengths are the suspension of enforcement during the moratorium and the fact that a confirmed project also binds dissenting creditors.

But concordat is not a way out for everyone. For a business that doesn’t generate cash, it only delays the problem.

Questions to Answer Before Deciding

1. If the company keeps operating, can it generate enough cash to pay its debts?
2. How is debt split between banks, suppliers, public authorities and employees?
3. How many creditors are there, and what share do the top five hold?
4. Which claims are secured?
5. How have relationships with creditors been so far?

The answers often point to the right path on their own.

Order Matters Too

Many companies try an out-of-court settlement first and apply for concordat if it fails. That is a sensible sequence.

But be careful: protocols signed, new collateral granted and payments made during the settlement phase can directly affect a later concordat. The legal framework needs to be planned from day one.

How Denova Helps

Choosing between concordat and restructuring requires financial analysis and legal assessment together. Because we offer Financial Restructuring and Concordat Advisory under one roof, we make that decision with you, based on the data.

To discuss which path suits your company, write to us.