Vestel Elektronik: Bonds are in the low-40s and still too expensive; Downgrade to Underweight

研报英文原文证据摘录

Vestel Elektronik: Bonds are in the low-40s and still too expensive; Downgrade to Underweight

J P M O R G A N CEEMEA Credit Research

17 July 2026

▼Underweight

Vestel Elektronik Previous: Neutral

VESTL

Bonds are in the low-40s and still too expensive;

Downgrade to Underweight

EM CEEMEA Corporate Research

Nikhil Bhat, CFA AC

(44-20) 3493-8074

nikhil.x1.bhat@jpmorgan.com

After discussions with Vestel management and its restructuring advisors, we J.P. Morgan Securities plc

believe the primary objective is to restructure the capital structure as a going

concern, underpinned by an operational turnaround plan which is currently being

worked on.

Vestel's move to apply for local debt restructuring and appointment of financial

advisors for its Eurobonds, we believe, signals the beginning of the end, as we see

the company’s business as operationally unviable. Its Turkish cost base is

uncompetitive, with no credible path to turn it around. Ongoing EBITDA losses

will require constant cash injections and if that capital comes from local banks,

bondholder recovery will be severely impaired, in our view.

We downgrade the VESTL 29s to Underweight (quoted 36/41 as at EOD July 16th,

2026). Capital injections from shareholders or favourable restructuring treatment

for bondholders are the key risks to our call.

Operations Remain Uneconomic

We note that Vestel’s problems are more structural and not just a function of a heavy

debt load or elevated interest expense. Yes, liquidity is tight ($45mn in 1Q26 cash

balance vs. $2.3bn of gross debt, of which $1.2bn was due within 12 months of

Mar-2026), but the more fundamental issue is that the company's revenues do not

cover its costs.

Despite reducing its workforce from 19k as of YE-24 to 12.4k as of Mar-2026,