Pursuant to the Presidential Decision published in the Official Gazette dated 25 December 2025 and numbered 33118, the application period of the financial restructuring (debt restructuring) mechanism regulated under Provisional Article 32 of the Banking Law No. 5411 has been extended for an additional two years. This regulation aims to enable companies that maintain credit relationships with banks, financial leasing companies, factoring companies, financing institutions, and other financial institutions to restore debt sustainability in cases of payment difficulties, to continue their operations and to maintain their contribution to employment.
Provisional Article 32 first entered into force on 19 July 2019, and its application period has been extended through Presidential decisions over the years. Most recently, with the decision dated 25 December 2025, the application period has once again been extended to remain in force until the end of 2027.
Under Provisional Article 32 of the Banking Law No. 5411, the financial restructuring process for companies may include the following measures:
- extension of loan maturities or renewal of existing loans,
- provision of additional loans, subject to the provisions of Article 9(1)(b) of the Financial Leasing, Factoring and Financing Companies Law No. 6361,
- reduction of or partial/full waiver of principal, interest, default interest, late payment penalties, and profit shares,
- reduction of collateral,
- conversion of bank receivables into equity participation in the company,
- partial or full conversion of principal, interest or profit share receivables into equity, transfer of such receivables to special purpose vehicles or investment funds, or their partial or full liquidation against in-kind assets belonging to the debtor or third parties,
- execution of protocols jointly with other creditor institutions.
During the implementation of these measures, exemptions are granted from stamp duty, fees, banking and Insurance transactions tax and the resource utilization support fund. In addition, amounts waived from collection are treated as worthless receivables for banks and financial institutions and as waived liabilities for companies, while the durations of incentive certificates, export commitment periods and credit guarantee mechanisms included within the scope of the restructuring are deemed to be extended for the period stipulated in the agreements concluded between the company and the creditor institutions under the Financial Restructuring Framework Agreements. Furthermore, collateral reduction, debt waiver or write-off transactions carried out within the scope of restructuring do not constitute embezzlement, and even if the restructuring process is not fully implemented, the tax and fee exemptions previously granted are not revoked.
For a company to be included within the scope of debt restructuring, it is mandatory that its financial condition be examined by independent audit firms or authorized expert institutions. It shall be determined that the company will regain repayment capacity as a result of the restructuring. However, where the same debts are restructured again within two years, the tax and incentive exemptions provided under this article shall not apply.
In this context, companies that are indebted to banks or other financial institutions are advised to promptly review their current financial position and credit relationships, assess whether they may benefit from debt restructuring opportunities, and initiate the necessary preparations without delay. Considering that debt restructuring processes in practice are time-consuming and multi-stakeholder in nature, involving the preparation of financial statements, procurement of independent assessment reports and negotiations with creditor institutions, early action by companies is expected to provide significant legal and financial advantages. Particularly for companies that are expected to regain repayment capacity as a result of restructuring, the extension of the application period constitutes a critical opportunity, which should be evaluated through a planned and strategic approach.
