An Istanbul court has provided Mega Polietilen (MEGAP) with bankruptcy protection, referred to as “concordato” in Turkey, for a period of three months, the company said on August 19.

Adiyaman-based Mega Polietilen, launched in 2005 and listed on Borsa Istanbul in 2012, is a textile company that produces polyethylene foam and fabric. The company’s official website is currently not working.

In 2022, then minister of industry Mustafa Varank opened Mega Polietilen’s new plant.

Eda Ozhan currently holds a 57% stake in the company. 

According to Konkordatotakip.com, a total of 1,554 companies in Turkey applied for bankruptcy protection in January-July, up from 1,516 in 2023 as a whole.

The annual number of bankruptcy protection applications peaked at 3,691 in 2019.

In November, Turkey’s trade ministry extended “regulatory forbearance” measures that apply to “zombie” companies until the end of 2024.

On September 15, 2018, the forbearance measures were introduced by the government in response to the previous month’s Turkish lira crash. Since then, the government has continuously extended the measures.

The equity figures of companies with FX debt fell into negative territory after their lira-denominated debt figures boomed in parallel with the sinking lira.

Since 2016, Turkish corporates have felt substantial pressure from economic fluctuations and government demands. Local banks have been pushed by officials into pouring in cheap loans to keep the sinking domestic economy afloat.

In 2019, Turkey faced a rush for “concordato” status offering temporary protection from creditors as a result of the monetary tightening that was introduced following the August 2018 lira crisis.

To overcome the bankruptcy wave, the government introduced the regulatory forbearance measures, and these logically added to the growing number of “zombie” companies in the country.

With the COVID-19 pandemic, the forbearance "business" got beyond control.

In July 2023, the government launched a new monetary tightening cycle.

The textile industry subsequently became a big casualty of the economic U-turn that accepted higher interest rates amid rampant inflation.

Mega Polietilen became the first listed company to apply for bankruptcy protection.