Basic Principles Regarding Public Offering* Nezihe Boran Introduction Public offerings attracted a great deal of attention from companies and investors in the first quarter of 2021. Beyond any doubt, one of the biggest benefits of public offerings is that it provides liquidity to the company (according to the method1 to be followed) and is a source of unsecured and non-recourse financing. Aside from this, public offerings of shares ensure the institutionalization of the company offered and, thus, the company becomes independent from a specific individual. The recognition and credibility of the company increases. Considering the benefits of a public offering, it seems that this momentum will continue to increase in the upcoming period. Many products, such as company shares, debt instruments, and warrants may be subject to a public offering. This Newsletter refers to the public offering of company shares.2 Below, the main legislation that the companies will be subject to in initial public offerings in Turkey’s capital markets, and the conditions deemed necessary by the Capital Markets Board (“CMB”) and the basic principles regarding a public offering process, will be focused on. * Article of April, 2021 1 It is necessary to differentiate the benefits expected from a public offering according to the method to be followed when going public. If the company offers its own shares to the public, the funds will come directly to the company. However, a public offering can also take place with the sale of shares by the shareholders. In such a case, the funds come to the account of the shareholder of the relevant company, not to the company, and the shares of the company only change owners. 2 Companies deemed to have been offered to the public with more than five hundred shareholders are not covered by this Article.
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