The Amounts In The Pre-Conditions To Be Complied With Before The Initial Public Offering Of Shares In Several Sectors Were Decreased

The Capital Markets Board ("Board" or "CMB") decreased the financial thresholds for financial statements, especially considering the sectoral differences of the companies that submitting to the Board for initial public offering and the 12th Development Plan ("Plan") prepared by the Presidency of the Strategy and Budget Directorate.

The sectors identified as priority in the Plan are energy, chemicals, agriculture and defence Industries.

What's happened?

According to the regulation issued as a consequence of the CMB's decision dated 29 December 2023 and numbered 2023/82, pursuant to Article 8 of the Communiqué No. II-16.1 on the Principles Regarding the Exclusion of the Companies from the Scope of the Law and the Obligation to Trade their Shares on the Stock Exchange ("Communiqué"), the thresholds to be reached in accordance with the financial statements of the last two years prior to the submission date, which have been audited by private independent auditors and prepared in accordance with the CMB regulations, have been determined as follows:

1. For 2022, total assets as at least TL 450,000,000 and net sales revenue as least TL 270,000,000, and
2. For 2023, total assets as at least TL 1,500,000,000 and net sales revenue as at least TL 750,000,000.

What's changed?

With the last regulation, aforementioned amounts have been decreased as follows:

Who will it be applied to?

Such decreased amounts shall be applied to the initial public offering submissions of the companies operating in the following sectors:

1. Partnerships operating in the renewable energy sector and generating at least 75% of their revenues from renewable energy generation sales as of the financial statements of the last two years prior to the submission date, which have been prepared in accordance with the Board regulations and have been audited by private independent auditors.
2. Partnerships engaged in production in the petrochemical sector with the licence of the Energy Market Regulatory Authority and which generate at least 75% of their revenue from petrochemical production sales as of the financial statements of the last two years prior to the submission date, prepared in accordance with the Board regulations and have been audited by private independent auditors.
3. Partnerships operating in the defence industry sector or providing services to the said sector in the field of information and communication technologies and software, and which generate at least 75% of their revenue from production / service sales for the defence industry as of the financial statements of the last two years prior to the submission date, which have been prepared in accordance with the Board's regulations and have been audited by private independent auditors.
4. Partnerships operating in the agricultural sector, and which generate at least 75% of their revenue from the sales of unprocessed raw products obtained as a result of agricultural production as of the financial statements of the last two years prior to the submission date, which have been prepared in accordance with the Board's regulations and have been audited by private independent auditors.
5. Partnerships that are certified by a public authority to have an innovative and scalable business model that generates high added value based on advanced technology by supporting green and digital transformation and that have any two of the following conditions and which generate at least 75% of their revenue from these activities as of the financial statements of the last two years prior to the submission date, which have been prepared in accordance with the Board regulations and have been audited by private independent auditors.

Furthermore, in order to apply these decreases, the Board also requires that the partnerships fulfil the following conditions:

1. As of the submission date, to be accepted from one of the regions designated as a Technology Development Zone by the Ministry of Industry and Technology ("Ministry") and to continue its activities in this region,
2. As of the submission date, having an active R&D Centre approved by the Ministry in accordance with the Law No. 5746 on Supporting Research, Development and Design Activities
3. To have a patent certificate issued by the Turkish Patent and Trademark Office within the last five years
4. To receive financial support within the scope of R&D, Product Development and innovation support from the Small and Medium Scale Enterprises Development Organisation within the last five years,
5. To have a public-funded R&D project started or completed within the last five years.

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