Restructuring is defined as the work to review the organizational structure of an enterprise according to the scientific management principles, correct the aspects that are defective and/or missing, and restore it to a form aiming at the goals and operating in the most efficient way under existing conditions1.

Corporate restructuring, on the other hand, refers to radical changes in the financial structure, management, ownership, or commercial portfolio of a company in terms of shareholders and creditors of the company to increase its value. The desired result to be achieved with corporate restructuring is the restructuring of the companies that are able to continue to exist, on the other hand, the liquidation of the companies that are unable to continue to exist, the strengthening of the financial sector, the provision of the necessary conditions for long-term economic growth.2

Corporate restructuring has two aspects, financial and operational. Financial restructuring, in general, includes the methods of restructuring active and passive items, obtaining additional loans, regulating cash flow, creating a new payment plan for debts, acquiring some shares for the company in exchange for the debts by creditors enabling them to take part in the management of the company to keep the company operational, and so on. Operational restructuring, on the other hand, consists of the methods of improving corporate governance, merging and acquisition, buying a company by borrowing, selling a part of the company, company demerger, exchanging shares between the affiliates of the parent company, selling some units of the company or closing unprofitable units, imposing expenditure and labor restrictions, etc.


In the Istanbul Approach, which is the first study on restructuring in our country and based on the London Approach, with the "Financial Restructuring Program" (the "FRP"), prepared by the Bank Association of Turkey and put into effect in June 2002, it was aimed to prevent producer companies experiencing financial bottlenecks from going bankrupt and allow them to continue to create added value and fulfill their repayment obligations to the financial sector.

Following the Istanbul Approach, the provisions related to the adjournment of bankruptcy and concordatum, which were put into effect by Law No. 4949 dated 17.07.2003, although they have been present in the Turkish Legal system for a long time, and then the provisions related to restructuring through reconciliation with the Law No. 5092 dated 12.02.2004 were added to the Enforcement and Bankruptcy Law (the "EBL").

As Prof. Dr. Selçuk Öztek stated "First of all, the institution of adjournment of bankruptcy is not a means of "restructuring". Its main function is to open a way to concordatum and debt restructuring through reconciliation"3, however, unfortunately, due to the fact that the regulations on the institution of restructuring through the concordatum and reconciliation did not meet the needs, the adjournment of bankruptcy was considered the only remedy. This situation lasted until the adjournment of bankruptcy was repealed by an amendment to the Enforcement and Bankruptcy Law with Law No. 7101 dated 28.02.2018 and, thus, the concordatum institution was brought to the fore. The institution of restructuring through reconciliation, however, has not received the necessary attention.

The Banks Association of Turkey has made a public announcement on 16.07.2021 and announced that it has made changes to the Financial Restructuring Framework Agreements (Small and Large-Scale Implementation) in force to ensure more efficient operation of financial restructuring processes after the Istanbul Approach.4 Thus, it has been aimed to enable companies that intend to pay their debts to banks and other financial institutions, but are unable to fulfill their obligations because of the deterioration in their income-expense balance, to fulfill their repayment obligations.

It was stated that the purpose of the Financial Restructuring Framework Agreements5, on the other hand, is to ensure that borrowers can fulfill their repayment obligations and continue to contribute to employment through measures to be taken in the forms of extending the payment time of loans of commercial loan borrowers who have temporary problems or are considered likely to have problems in repaying debts to banks and other financial institutions in accordance with Provisional Article 32 of the Banking Law No. 5411 and related legislation (S. and L. Scale); renewing their loans (S. and L. Scale); providing them with an additional loan without prejudice to the provisions of article 9/1-b of the Financial Leasing, Factoring, and Financing Companies Law No. 6361 (L. Scale); reducing their debts arising from the principal, interest, default interest, late penalties, and profit share, as well as all other types of receivables arising from the loan relationship, or partially or completely giving up them, reducing the collateral (S. and L. Scale);  converting the receivables arising from the principal, interest or profit share of the debts, partially or completely, into partnership, transferring or assigning the debts to special-purpose companies and investment funds established in accordance with the Capital Markets Law No. 6362 in exchange for a price in-kind, in-cash, or as conditioned for collection, liquidating, selling them, partially or completely, in exchange for in-kind values belonging to debtors or third parties (S. and L. Scale), taking them out of the balance sheet (L. Scale); making protocols by acting with other Creditor Institutions and creditors regarding the loan debts (S. and L. Scale).


Operational restructuring, on the other hand, appears as a restructuring method used to improve the situation of companies experiencing financial difficulties, and to increase the profitability and efficiency of companies that do not have financial problems. It is aimed in this type of restructuring to identify the problem and its source as a result of the correct interpretation of the early warning signals determined by taking into account the elements such as the sector (in which the companies operate), turnover, risk; then, to determine the most appropriate method for the company by cost-cutting methods such as improving corporate governance, merger and acquisition, borrowing and buying a company, selling a part of the company, company demerger, exchanging the shares between the affiliates of the parent company, issuing new shares without increasing the capital, selling some units of the company or closing unprofitable units, imposing expenditure and labor restrictions.


The success of financial and operational restructuring depends primarily on ensuring economic stability, making/ revising legal regulations closely related to the restructuring issue, implementing bookkeeping systems that comply with international standards to understand the company's real financial situation, adopting and improving corporate governance principles, and receiving the necessary support from specialized professionals in these matters. 


1. Yalçin Tiftik, Management and Reorganization , p. 157 (Yalçin Tiftik, Yönetim ve Reorganizasyon sy. 157)

2. Pelin Ataman Erdönmez, Corporate Restructuring Process After the Economic Crisis (Economic), p. 67 (Pelin Ataman Erdönmez, Ekonomik Kriz Sonrasi Kurumsal Yeniden Yapilandirma Süreci (Ekonomik), sy. 67)

3. The paper, presented by Prof. Dr. Selçuk Öztek at the conference of the Bank Association of Turkey on the "Current Problems in Enforcement and Bankruptcy Law". (Prof. Dr. Selçuk Öztek, TBB'nin "Icra ve Iflas Hukuku'nda Güncel Sorunlar" konulu konferansinda sunulan teblig)

4. Public announcement of the Bank Association of Turkey dated 16.07.2021

5. Financial Restructuring Framework Agreement - Large-Scale Implementation - July 2021, Financial Restructuring Framework Agreement - Small Scale Implementation - July 2021,

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