Debt Pushdown Under Turkish Law

How an acquisition is structured often has a significant effect on its success. Investors often establish a special purpose vehicle (SPV) for acquisition transactions and SPVs commonly borrow funds from banks or other financial institutions to finance these operations. The repayment of funds (with interest) and the performance of tax obligations require a well-planned financial structure. One of the most well-known types of financial structure is debt pushdown.

An acquisition structure involving debt pushdown is implemented as follows:

• The investor incorporates an SPV. Given that the SPV's sole purpose is to acquire the target's shares, the SPV has no business operations.
• The SPV borrows funds from banks or other financial institutions to finance the costs incurred in the acquisition of the target's shares.