Following the announcement of new trading principles which will
be applicable for thin stocks as from 01.10.2010, CMB has continued
to take additional measures for the efficient price formation in
Turkish Stock Markets and for the prevention of stock market
manipulation/disorder. Within this framework, CMB has revised the
legal infrastructure of trading bans and, in order to start off
with a clean slate, announced a general amnesty for persons which
have been subject to such bans. In addition to the above, CMB has
announced new principles for the voluntary delisting of listed
companies with very low free float and thus set the background for
a deeper stock market. The announcement of the principles has long
been awaited by certain listed companies and, accordingly, the
market may observe a considerable number of delisting practice in
the upcoming term.
Below is a brief highlight of the key aspects of the principles
for voluntary delisting:
Investment companies, real estate investment companies and
venture capital investment companies cannot benefit from the
envisaged voluntary delisting process.
In order for ISE to evaluate a delisting filing, the
controlling shareholder(s) shall at least hold 95% of total amount
of shares or voting rights in the listed company. The controlling
shareholders may have reached such threshold either through a
tender offer or through any other means.
Implementation of the delisting process requires a voluntary
tender offer ("VTO") and thereby a tender offer filing
addressed to CMB.
Following the BoD decision initiating the process, the General
Assembly of the listed company shall make a decision with respect
to delisting and shall approve the voluntary tender offer price to
be applied in relation to the designated delisting. The decisions
must be taken by the General Assembly convened with a 2/3
If the 95% threshold is reached as a result of a mandatory
tender offer ("MTO") and a delisting intention comes up
immediately upon completion of the MTO, the price applied in the
MTO shall be applicable for the VTO to be conducted for the purpose
If the delisting does not come up immediately as a result of a
MTO, the highest of the prices, (i) determined by two CMB licensed
appraisal institutions and (ii) determined through the calculation
based on weighted average of daily weighted average prices which
have been observed for a period of 5 years preceding the BoD
decision initiating the delisting process and which have been
adjusted by taking into account time value of money, shall be
applicable for the VTO to be conducted for the purpose of
delisting. If there had been an MTO practice within a 5 year period
preceding the BoD decision, the relevant calculation shall commence
as from the date on which the said MTO process was completed.
The VTO price must be paid in cash.
The VTO shall be conducted pursuant to the principles of the
CMB Communiqué Serial: IV, No: 44 governing tender
Upon completion of the VTO process, the company is delisted
from the ISE.
The Resolution requires that, for shareholders who did not
respond to the VTO, sufficient amount of cash calculated as per the
VTO price shall be deposited to an account opened with ISE
Settlement and Custody Bank for a period of 3 years commencing as
from the delisting decision of the ISE. This principle paves way
for shareholders to benefit from the VTO for an extended
The Resolution governs disclosure requirements regarding
delisting and VTO procedures in detail.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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