The İmamoğlu operation hit them the hardest: Massive loss in shares!
The political crisis in Turkey, which deepened following the arrest of İmamoğlu, is shaking major industrial companies. As Moody’s and S&P downgraded the credit ratings of Vestel, Arçelik, and Şişecam, economic instability in the country has further increased.
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The political turmoil ignited by the arrest of Istanbul Metropolitan Municipality Mayor Ekrem İmamoğlu in Turkey has affected not only politics but also the economy. Global credit rating agencies have downgraded the financial ratings of Turkey's largest companies one after another.
Moody’s downgraded the credit rating of Vestel, one of Europe's leading home appliance manufacturers, to Caa1. This rating is only three notches above the default level. The weakening liquidity position and deteriorating operational performance of the company were cited as the reasons.
Arçelik was downgraded to the BB- level by S&P last month. Şişecam, the flagship of Turkey's glass industry, also saw its rating drop to B2 by Moody’s in March.
According to the financial agency Bloomberg, the outlook for large companies in Turkey is becoming increasingly bleak due to the impact of political instability.
BORROWING COSTS ARE RISING RAPIDLY
Following the operation against İmamoğlu, the Central Bank raised the overnight lending rate amid increasing pressure on the exchange rate. This situation has increased the financing costs for companies.
According to Bloomberg data, Vestel's 2029 dollar-denominated bond has lost approximately 10 cents in value since the beginning of March. It is currently trading at 91.2 cents. Arçelik's 2028 bond has fallen from 105 cents to 101 cents.
Aswini Krishnan, an analyst at AllianceBernstein, stated, “Anti-inflation policies are having side effects on large industrial companies. However, the real danger is the ongoing political tension.”
Paul Lund from Fitch also noted that confidence in Turkey has been severely damaged, access to foreign currency has become difficult, and the depreciation of the Turkish Lira has increased financing costs.