Financial Assistance Squeeze-Outs And De-Listings

The debate concerning the use of debt pushdown mechanisms in secured financing of listed company acquisitions has been ongoing in Turkey since the late 1990s. With increasing investment by foreign private equity funds, the scope of this debate is broader, and covers the use of a target company’s assets for securing the financing of an acquisition. The CMB's approach to this structure appears to be controversial. Recently, the CMB encountered an unpleasant experience where a private equity fund backed out of a deal due to a lack of financing. According to public disclosures made by the target company in that matter, a fund which had agreed to purchase the company’s shares terminated its share purchase agreement with the sellers on the ground that it had financing-related problems caused by economic fluctuations. The CMB’s position was that such financing-related problems would not have occurred had the financing not been secured by the target company’s assets. Reportedly,