IPO Advisory

Initial Public Offering Process

1. 01

   Checking the Preconditions

   Before the application, it is examined on the basis of the accounting records whether the company meets the preconditions listed in the Communiqué on Shares. (Communiqué on Shares VII-128.1, Art. 5)

   • The existing paid-in or issued capital must have been paid in full
   • Within the two years before the application, the capital must not include revaluation surplus funds created by carrying assets at fair value, except for funds permitted by the legislation
   • According to the latest financial statements in the prospectus, non-trade receivables from related parties must not exceed 20% of total receivables or 10% of total assets
   • Except for investment companies, the company must not meet the conditions for exclusion from the scope of the law in subparagraphs (a) and (b) of Art. 8/1 of the Communiqué on Principles Regarding Exclusion of Companies from the Scope of the Law and the Obligation for Their Shares to Be Traded on the Exchange (II-16.1); subparagraph (b) is considered only for net sales revenue

   If the company converted into a joint stock company within the two years before the application, the pre-conversion equity items must be shown as separate items in the opening balance sheet, and an accountant’s report confirming this must be issued. (Communiqué on Shares VII-128.1, Art. 5) For changes of company type, see our Change of Company Type page.

2. 02

   Amending the Articles of Association

   The board of directors adopts the draft amendments bringing the articles of association into line with SPK regulations, and the company applies to the Board with the documents in Annex-1 of the Communiqué on Shares. The amendments to the articles of association are resolved at a general meeting to be held within six months at the latest of the date of the Board’s favourable opinion; drafts not approved within this period lapse. (Communiqué on Shares VII-128.1, Art. 6, 7)

   • The current articles of association including all amendments
   • A table showing the capital increases since formation and their sources
   • A notarised board of directors resolution and the draft amendments
   • An accountant’s report confirming that the existing capital has been paid
   • If a capital increase from internal resources is planned, a sworn-in certified public accountant (YMM) report and the statement under TTK Art. 457
   • The shareholding structure showing holders of five per cent or more and information on the board of directors
3. 03

   Financial Statements and Independent Audit

   The issuer is obliged to prepare its financial statements and reports in a timely, complete and accurate manner, in accordance with the regulations set by the Board within the framework of Turkish Accounting Standards. The Board is authorised to require an independent audit report in situations such as a public offering. (Capital Markets Law No. 6362, Art. 14) The financial statements to be included in the prospectus and the related independent audit and/or limited review reports, together with the annual reports and profit distribution tables for the relevant years, are attached to the prospectus approval application. (Communiqué on Shares VII-128.1, Annex-2)

4. 04

   Prospectus Approval Application

   In a sale of existing shares by shareholders, the authorised institution applies to the Board for prospectus approval; in a public offering through a capital increase, the company or the authorised institution applies. (Communiqué on Shares VII-128.1, Art. 6, 7) Before the public offering, costs such as advisory, intermediation, independent audit, advertising and statutory fees are reported to the Board item by item. (Communiqué on Shares VII-128.1, Art. 32)

   In a public offering through a capital increase, a report on the intended use of the funds to be raised is resolved by the board of directors, sent to the Board with the application and disclosed to the public. (Communiqué on Shares VII-128.1, Art. 33)

5. 05

   Price Determination and Sale

   If the sale price is above nominal value, the price determination report prepared by the authorised institution is published on KAP at least three days before the start of the public offering. If the authorised institution is a related party of the company being offered, the report is prepared by another authorised institution. (Communiqué on Shares VII-128.1, Art. 29) The sale method is set out in the underwriting agreement signed between the issuer or the offering shareholders and the authorised institution. (Communiqué on Shares VII-128.1, Art. 30)

6. 06

   Post-IPO Obligations

   • A report on whether the funds have been used as stated in the prospectus is prepared and published on KAP within ten business days after the first two financial statements announced after trading on the exchange begins (Communiqué on Shares VII-128.1, Art. 33)
   • For two years after trading begins, a report on whether the assumptions underlying the offering price have materialised is published within ten business days of the announcement of the financial statements (Communiqué on Shares VII-128.1, Art. 29)
   • Information, events and developments that may affect investment decisions are disclosed to the public (Capital Markets Law No. 6362, Art. 15)
   • Financial statements are prepared under SPK regulations and disclosed to the public together with the independent audit reports (Capital Markets Law No. 6362, Art. 14)