Amendments to IPO Financial Conditions
Certain amendments to IPO financial conditions are made with the Capital Markets Board Decision dated December 28, 2023, and numbered 81/1811 published in the Capital Markets Board Bulletin dated December 29, 2023, and numbered 2023/82 (“Decision”).
1. New minimum paid in capital of the companies that will adopt the Registered Capital System has been determined.
The minimum paid in capital of the companies adopting registered capital system has been determined as TRY 100 million.
2. The Capital Markets Board (“CMB”) has reevaluated for the conditions of initial public offerings (IPOs) for the year 2024.
The Decision regulates the requirements for companies making their IPO, ensuring their financial statements comply with CMB regulations and have undergone independent auditing. In this regard, to make an IPO application, companies must have minimum total assets of TRY 450 million and a minimum net sales revenue of TRY 270 million for 2022 year-end financial statements. These figures have been set at a minimum of TRY 1.5 billion for total assets and TRY 750 million for net sales revenue for the year 2023.
Pursuant to the Decision, if the market value of the shares to be offered in the IPO is (i) below TRY 400 million, then intermediary institutions must underwrite for all unsold shares; (ii) between TRY 400 and TRY 800 million then intermediary institutions must underwrite the entire amount up to TRY 400 million and half of the amount exceeding TRY 400 million.
Lastly, if the market value of the shares to be offered is below TRY 500 million, there is a requirement that, prior to the approval of the IPO prospectus, shares equivalent to 25% of their nominal value, with the shareholders’ pre-emptive rights being completely restricted, must be prepared for sale.
The aforementioned amendments have raised the financial thresholds for companies going public, leading to a more stringent structure in the IPO process.
The new determined conditions shall not apply to IPO submissions introduced before December 31, 2023.
Please do not hesitate to contact us if you have any questions regarding above matters.