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Recent Developments in Turkish Capital Markets – June 2022

Your Capital Markets Team in Türkiye summarized the establishment of Istanbul Financial Center and the new TL borrowing restriction, as well as issuances approved and regulatory changes introduced by the Capital Markets Board during June 2022. 

Commodity Market established at Borsa İstanbul

As announced in a press release published on the official website of Türkiye's Ministry of Treasury and Finance, a Commodity Market has been established at Borsa Istanbul. Following completion of the relevant studies, the issuance of gold certificates will be possible on this market.

In this regard, the discount rates determined by the Capital Markets Board (the “Board”) will be applied to the fees collected by the Board for the related issuances in order to encourage the outsourcing of funds in domestic public offerings and to encourage companies to raise funds abroad through the issuance of capital market instruments.

The period agreed for the financial statements to be attached to the prospectus in an initial public offering of shares has been extended

The Board has extended the period of financial statements that can be provided as an annex to the prospectus in initial public offerings to 30 June 2022 for the 2022 period. Accordingly, 30 June 2022 is the deadline to offer shares by submitting the quarterly interim financial statements dated 31 March 2022 as an annex to the prospectus.

A resolution on the implementation of cash and credit transaction requests in an initial public offering of shares has been published

The Board adopted a resolution on how investor demands subject to cash and credit transactions will be implemented by intermediary institutions in initial public offerings and provided further explanations of these issues.

The Board published the Sustainability Report template to be used within the scope of the sustainability principles compliance framework

In accordance with the Corporate Governance Communiqué, the Board has decided that the disclosures to be made within the scope of the sustainability principles compliance framework by companies whose shares are traded in the Main Market, Star Market or Sub-Market of the Istanbul Stock Exchange will be made using the Sustainability Report template published by the Board on the Public Disclosure Platform. The template is to be used for reporting purposes starting in 2022.

Compliance with sustainability principles are to be reported annually using the Sustainability Report template within the reporting period of the financial reports, and in any event, at least three weeks before the date of the general assembly meeting.

Decision of the Banking Regulation and Supervision Agency sets a limit on foreign currency assets on Turkish lira-denominated loans

Türkiye's Banking Regulation and Supervision Agency has introduced a Turkish lira borrowing restriction for non-financial institution companies (the “Companies”) subject to an independent audit with its Decision (the “Decision”) dated 24 June 2022 and numbered 10250.

According to the Decision, Companies that meet all three of the conditions set out below are not allowed to use new commercial cash loans denominated in Turkish lira. The calculations described below will be made over the consolidated balance sheets for Companies that are obliged to prepare consolidated financial statements. The conditions are:

  • being a company subject to an independent audit pursuant to Decree Law No. 660 and related regulations;
  • the TL equivalent of the company's FX cash assets (including gold, effective foreign currency and FX deposits in banks) exceeding TL 15 million;
  • the TL equivalent of the company's FX cash assets exceeding 10% of its total assets OR net sales revenue for the previous year.

Individuals and individual shareholders are not included in the scope of this Decision.

Exceptions:

  • It is possible for Companies that have an FX net position deficit approved by an independent audit firm to benefit from commercial cash loans denominated in TL, provided that the FX net position deficit is limited to the three-month period following the application date.
  • The criteria to be considered for Companies that will benefit from this exemption is the presence of a foreign currency position deficit, i.e., if their foreign currency liabilities are greater than their FX assets in any upcoming three-month period. In such case, these Companies will be able to benefit from commercial cash loans denominated in TL, to the extent that their FX liabilities exceed their FX assets.

Companies whose TL equivalent in FX cash assets does not exceed TL 15 million will not be included in the restriction within the scope of the Decision. However, as of the loan application date of these Companies:

  • an independent audit firm must determine their current FX cash assets and the total assets and net sales revenue of the previous year according to the most up-to-date financial statements;
  • the Companies must declare and seek to ensure that the TL equivalent of their FX cash assets does not exceed TL 15 million during the term of the loan, and if it does, they must ensure that their total assets or previous year's net sales revenue, whichever is larger, does not exceed 10%; and
  • in order to ensure that the above declaration is controlled by a bank, Companies are required to submit to the bank within the first 10 business days of each month the current value of their FX cash assets, total assets and net sales revenue of the last 12 months as of the end of the previous month, according to the previous month-end balance sheet.

Istanbul Financial Center is established

The Istanbul Financial Center Law (the “Law”) numbered 7412 and published in the Official Gazette dated 28 June 2022 has established the Istanbul Financial Center (the “IFC”). The Law aims to create a financial centre by moving financial activities to the IFC, with the aim to further develop financial activities and increase employment.

Operation and management of the IFC

Various management activities of the IFC, such as the operation, management, and leasing of facilities, will be carried out for 20 years by a joint-stock company to be established by the Turkish Wealth Fund and subject to private law.

What are the activities that can be conducted at the IFC?

Financial service activities will be conducted at the IFC. Financial services are defined in the Law as banking, insurance, pension and private pension, financial leasing, factoring, financing, savings financing, payment services, electronic money services, and services within the scope of capital market legislation.

Financial services export

Financial services export is defined as services provided by participants operating at the IFC with a participant certificate to persons residing abroad, provided that the persons who benefit from these services benefit from them abroad. However, derivate transactions, asset purchases and sales and operations for the participant’s own account, and transactions that carry the savings of domestic residents abroad undertaken by the participants, will not be considered as financial service exports.

What is required to operate at the IFC?

A “participant certificate” is required to operate at the IFC. Participants can be natural persons, legal entities, branches, representative offices, liaison offices, regional management centres, ordinary partnerships and national wealth funds.

A “one-stop office” at the IFC will be established and will include representatives of various state ministries to facilitate communication and coordination between the participants and the authorities in relation to obtaining permits, licenses and other approvals required for their operation.

What advantages does the IFC provide?

The IFC provides several tax advantages as well as other advantages for other activities. 

Tax advantages

Participants can deduct 75% of the revenue generated within scope of financial service exports via the IFC from their corporate income tax base. Deduction rate will be applied as 100% for the 2022–2031 taxation periods. Therefore, all revenues generated from financial service exports can be deducted until 2031. This exemption is only applicable to financial service exports. Banking and insurance transaction tax on financial service exports via the IFC is also exempted.

 Employment

The Law also introduces certain advantages to personnel employed at the IFC. Accordingly, participants will now be able to deduct:

  • 60% of the monthly gross salary of such personnel, if they have at least five years of work experience,
  • 80% of the monthly gross salary of such personnel, if they have at least 10 years of work experience.

This deduction will apply for personnel who worked abroad in the last three years, before starting to work at the IFC.

The leasing of real estate such as offices at the IFC will be exempted from fees and duties and the documents prepared for these purposes will be exempted from stamp tax duty.

In addition, financial activity fees will be exempted for the headquarters and branches of participants operating at the IFC for five years as of the effective date of the Law. The fees will also be exempted for the regional treasury and financial management centres of participants who are actively operating in at least three countries.

Other advantages

The operations, transactions, and communications conducted among IFC participants within their scope of activities conducted at the IFC are not required to be in the Turkish language. Further, the parties will be free to choose a governing law other than Turkish law in their agreements within the scope of activities they conduct at the IFC, provided that it does not contradict the applicable laws to which they are subject.

 Other remarks in relation to real estate

Real estate of the IFC can only be used within the purposes stated in the IFC’s operation project and management plan. The operation project and management plan will be prepared and registered by the management company of the IFC, and if a participant certificate is cancelled, the lease agreement to operate at the IFC will automatically terminate.

 ISSUANCES APRROVED BY THE CAPITAL MARKETS BOARD OF TÜRKIYE JUNE 2022

INITIAL PUBLIC OFFERINGS

COMPANY NAME

TYPE of SALE

SIZE of ISSUANCE

Makim Makine Teknolojileri

Sanayi ve Ticaret A.Ş.

Sale of Existing Shares

TRY 18,000,000

Pardus Girişim Sermayesi

Yatırım Ortaklığı A.Ş.

Offering Through Issuance of New Shares

AND

Additional Sale of New Shares

TRY 55,000,000

AND

TRY 11,000,000

Kocaer Çelik Sanayi

ve Ticaret A.Ş.

Offering Through Issuance of New Shares,

Sale of Existing Shares

AND

Additional Sale of New Shares

TRY 21,500,000,

TRY 25,250,000

AND

TRY 9,350,000

Rubenis Tekstil

Sanayi Ticaret A.Ş.

Offering Through Issuance of New Shares

TRY 24,500,000

Kiler Holding A.Ş.

Sale of Existing Shares

AND

Additional Sale of New Shares

TRY 97,500,000

AND

TRY 19,500,000

Koroplast Temizlik Ambalaj

Ürünleri Sanayi ve Dış

Ticaret A.Ş.

Offering Through Issuance of New Shares,

Sale of Existing Shares

AND

Additional Sale of New Shares

TRY 24,600,000,

TRY 42,200,000

AND

TRY 11,700,000

 

SHARE ISSUANCES of PUBLIC COMPANIES

COMPANY NAME

TYPE of SALE

SIZE of ISSUANCE

Vakıf Finansal Kiralama A.Ş.

Issuance Through Dividend

TRY 100,000,000

Türkiye İş Bankası A.Ş.

Issuance Through Internal Resources

TRY 5,500,000,000

Sarkuysan Elektrolitik Bakır

Sanayi ve Ticaret A.Ş.

Issuance Through Dividend

TRY 100,000,000

Yeni Gimat Gayrimenkul

Yatırım Ortaklığı A.Ş.

Issuance Through Internal Resources

TRY 80,640,000

Demisaş Döküm Emaye

Mamülleri Sanayi A.Ş.

Issuance Through Internal Resources

AND

Issuance Through Dividend

TRY 29,650,000

AND

TRY 17,850,000

Oyak Yatırım Menkul

Değerler A.Ş.

Issuance Through Internal Resources

TRY 206,000,000

Europap Tezol Kağıt Sanayi ve

Ticaret A.Ş.

Issuance Through Dividend

TRY 120,000,000

Inveo Yatırım Holding A.Ş.

Issuance Through Internal Resources

TRY 144,000,000

RTA Laboratuvarları Biyolojik

Ürünler İlaç ve Makine

Sanayi Ticaret A.Ş.

Issuance Through Internal Resources

TRY 57,029,786

Kızılbük Gayrimenkul

Yatırım Ortaklığı A.Ş.

Issuance Through Internal Resources

TRY 60,000,000

Sinpaş Gayrimenkul

Yatırım Ortaklığı A.Ş.

Issuance Through Internal Resources

TRY 626,806,568,68

İzmir Fırça Sanayi ve

Ticaret A.Ş.

Public Offering Through Issuance of New Shares

TRY 42,187,500

Sanifoam Endüstri ve

Tüketim Ürünleri Sanayi

Ticaret A.Ş.

Issuance Through Internal Resources

TRY 16,797,876

 

DEBT INSTRUMENTS ISSUANCES

COMPANY NAME

TYPE of SALE

ISSUANCE LIMIT

Ata Yatırım Menkul Değerler A.Ş.

Qualified Investor

TRY 90,000,000

Marbaş Menkul Değerler A.Ş.

Qualified Investor

TRY 135,000,000

Mercedes-Benz Finansman Türk A.Ş.

Private Placement / Qualified Investor

TRY 2,300,000,000

Odea Bank A.Ş.

Private Placement / Qualified Investor

TRY 2,370,000,000

Yapı Kredi Yatırım Menkul Değerler A.Ş.

Private Placement / Qualified Investor

TRY 2,289,000,000

İş Yatırım Menkul Değerler A.Ş.

Private Placement / Qualified Investor

TRY 8,800,000,000

Türkiye İhracat Kredi Bankası A.Ş.

Private Placement / Qualified Investor

TRY 1,000,000,000

Işık Yatırım Menkul Değerler A.Ş.

Qualified Investor

TRY 256,000,000

Çağdaş Faktoring A.Ş.

Qualified Investor

TRY 445,000,000

Global Menkul Değerler A.Ş.

Private Placement / Qualified Investor

TRY 90,000,000

Fiba Faktoring A.Ş

Private Placement / Qualified Investor

TRY 213,000,000

Erciyas Çelik Boru Sanayi A.Ş.

Private Placement / Qualified Investor

TRY 1,000,000,000

İş Faktoring A.Ş.

Private Placement / Qualified Investor

TRY 1,739,000,000

QNB Finansbank A.Ş.

Overseas

USD 5,000,000,000

Bien Finans Faktoring A.Ş.

Qualified Investor

TRY 150,000,000

Ulusal Faktoring A.Ş.

Qualified Investor

TRY 355,000,000

Opet Petrolcülük A.Ş.

Qualified Investor

TRY 1,000,000,000

Gap İnşaat Yatırım ve Dış Ticaret A.Ş.

Qualified Investor

TRY 1,000,000,000

Pınar Süt Mamulleri Sanayii A.Ş.

Private Placement / Qualified Investor

TRY 150,000,000

Suzuki Motorlu Araçlar Pazarlama A.Ş.

Private Placement / Qualified Investor

TRY 160,000,000

Turkish Bank A.Ş.

Private Placement / Qualified Investor

TRY 218,000,000

Koç Finansman A.Ş.

Private Placement / Qualified Investor

TRY 380,000,000

QNB Finans Faktoring A.Ş.

Private Placement / Qualified Investor

TRY 450,000,000

Migros Ticaret A.Ş.

Private Placement / Qualified Investor

TRY 750,000,000

Ak Finansal Kiralama A.Ş.

Private Placement / Qualified Investor

TRY 1,500,000,000

A1 Capital Yatırım Menkul Değerler A.Ş.

Private Placement / Qualified Investor

TRY 450,000,000

Vestel Elektronik Sanayi ve Ticaret A.Ş.

Private Placement / Qualified Investor

TRY 750,000,000

Vestel Beyaz Eşya Sanayi ve

Ticaret A.Ş.

Private Placement / Qualified Investor

TRY 750,000,000

Türkiye Vakıflar Bankası T.A.O.

Public Offering / Private Placement / Qualified Investor

TRY 30,000,000,000

Türkiye İş Bankası A.Ş.

Overseas

USD 1,500,000,000

Burgan Yatırım Menkul Değerler A.Ş.

Qualified Investor

TRY 200,000,000

Ünlü Yatırım Holding A.Ş

Qualified Investor

TRY 300,000,000

Fasdat Gıda Dağıtım Sanayi ve

Ticaret A.Ş.

Qualified Investor

TRY 400,000,000

Türkiye Kalkınma ve Yatırım Bankası

A.Ş.

Overseas

USD 400,000,000

 

OTHER ISSUANCES

COMPANY NAME

ORIGINATOR /

FUND USER

TYPE of CAPITAL MARKETS INSTRUMENT

TYPE of SALE

Değer Varlık

Kiralama A.Ş.

MNG Kargo Yurtiçi ve

Yurtdışı Taşımacılık A.Ş..

Lease Certificate Based on Management Agreement

Private Placement / Qualified Investor

Kalkınma Yatırım

Varlık Kiralama A.Ş.

Tarfin Tarım

A.Ş.

Lease Certificate Based on Management Agreement

Private Placement / Qualified Investor

Türkiye Menkul

Kıymetleştirme Şirketi

Fibabanka İkinci Varlık

Finansman Fonu

Fibabanka A.Ş.

Asset Backed Security

Qualified Investor

Türkiye Menkul

Kıymetleştirme Şirketi

Fibabanka Üçüncü Varlık

Finansman Fonu

Fibabanka A.Ş.

Asset Backed Security

Qualified Investor

Pasha Yatırım Bankası

A.Ş. Platin Kimya Varlık

Finansmanı Fonu

Platin Kimya

Mümessillik ve Dış

Ticaret A.Ş.

Asset Backed Security

Qualified Investor

 

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