Public Offering through Sale of Existing Shares
The shareholders of a company may offer some of their shares to public at or outside the Stock Exchange.
In order for shareholders to offer publicly their shares in a company; there should not be any records, by giving pledges, on the shares that restrict the transfer or circulation and prevent the shareholders from exercising their rights.
Company Board is required to prepare a proforma amendment on the article pertaining to the corporate capital in its Articles of Association document, and the CMB should approve the amendment request proposed by the company.
Primarily, an application to be traded at ECM can be made for new shares to be issued as a result of a capital increase made by partially or entirely restricting the preemptive rights of the current shareholders. In that way, it is aimed that the funds obtained from the sale of shares are kept in the company in accordance with the purpose of the market and used for the development and growth of the company. However, investors having a licence issued by the Undersecretariat of Treasury and venture capital investment trusts and funds may be able to offer their shares in the company during a public offering or after the shares begin to be traded on the Stock Exchange, provided that they met certain conditions.
Public offering through capital increase
Companies can get funding by issuing new shares through capital increase.
Non-public companies may offer their shares via capital increases by restricting preemptive rights of shareholders partially or fully. All of the capital must be paid. Before applying to the CMB, the following actions should be taken:
- The board of directors should draft an amendment of the capital article of the Articles of Association and obtain approval from the CMB for it.
- The general assembly of the company, within the scope of the Turkish Commercial Code - must decide on increasing the capital and limiting the preemptive rights.
Utilizing both Methods
Companies can use both methods together. In that way, both existing partners get revenues from the sale of their shares, and the company get funding.