Initial Public Offerings in Turkey

1. INTRODUCTION

Public offering may basically be defined as sale of stocks (shares) of a joint stock company to several unknown investors through a call and announcement. Public offering includes (i) every kind of appeal to public for purchase of capital markets instruments, (ii) invitation of public to subscribe in a joint stock company or act as its founder; (iii) continuous trading of shares in stock exchanges or other organized markets and (iv) sale of shares of publicly held joint stock companies to increase the capital of such companies. Accordingly, public offering may be conducted through issuance of any type of capital markets instruments excluding derivatives.

Under Turkish law, joint stock companies are the only private corporate entities entitled to conduct public offerings and issue capital markets instruments. Both joint stock companies with equity capital and joint stock companies with registered capital can make public offerings.