Turkish tycoon Sahenk faces losing Istanbul’s Galataport over €1B debt, reports Bloomberg

Turkish tycoon Ferit Sahenk’s Dogus Holding AS is in negotiations to potentially hand over part of his stake in Istanbul’s Galataport and shopping mall company to lenders, Bloomberg reports. The talks are focused on resolving a €1.02 billion ($1.1 billion) unpaid loan.

Reports indicate that lenders may gain control of less than half of the shares in Galataport Istanbul Liman Isletmeciligi & Yatirimlari AS, the formal name of the port operator.

Turkish tycoon Sahenk would retain the option to recover the shares upon repayment of the debt, according to the sources, who requested anonymity due to the confidentiality of the talks.

No final decisions have been reached, and discussions remain ongoing. The loan, issued in 2016, was intended for the construction of a cruise port and shopping mall complex in central Istanbul.

Dogus and six local lenders are negotiating an agreement, known as a contract of loyalty, which could allow the banks to raise their stake to 51% if the company fails to secure funds within a specified period. This would grant the lenders controlling ownership, opening the door for potential new investors.

Dogus Holding Chief Executive Husnu Akhan confirmed in a phone interview that an agreement with the lenders is near, likely to be finalized in November. He emphasized that the deal would benefit both the lenders and Dogus, though he declined to provide further details.

Once Türkiye’s richest person, Sahenk has shifted his investments toward hotels, marinas, and restaurants, including the Salt Bae chain, after selling his stake in Garanti Bank to Spain’s BBVA for nearly $5 billion. He has been working to meet commitments under a 2019 debt restructuring agreement.

Popular destination for the rich: Galataport

Galataport is a 400,000-square-meter mixed-use development located along 1.2 km of shore in Istanbul’s Karakoy neighborhood, on the European side of the Bosporus near the Golden Horn.

The development of Galataport, which opened in 2021, includes Istanbul’s cruise ship terminal, 250 shops and restaurants, a Peninsula hotel, the Istanbul Modern art museum, and various cultural and entertainment venues. It also serves as a host for festivals.

Despite its prime location and ambitious scope, Galataport has struggled to meet its revenue and cash flow projections. The project aimed to attract 25 million visitors and 1.5 million cruise passengers annually.