Turkey: Bridge Financing For Turkish Private Equity Market

Turkey is emerging market's dynamism and is a suitable area for future factors in the traditional market. Turkey tenders different kinds of investment projects which is long term allocation of funds so as to carry an investment idea. In respect to this, financial tools have a powerful influence on economy and assist to sustain projects successfully, so there are new opportunities for investors and many projects become to enhance in Turkish market through private equity funds.

Integration of Private Equity in Turkey

Private equity increases the importance of funds which form a basis for idea of security offering and it encompasses securities which invested in operating companies with a view to generating value. It is vital that investment typically last between 3-7 years depending on the investment focus of the company. There are different kinds of industry players. To start with, fund of funds means that pool funds together on the behalf of institutional investors in order to invest in PE funds. Secondly, there is institutional investor which is also called limited partners and covers insurance companies, pension funds, and family offices seeking portfolio diversification. Thirdly, general partners consist of private equity fund managers.

Turkish market has revealed for the resale of shares in non public companies so as to provide liquidity to holders in the absence of public trading markets. As a result of this, private equity sorts out in three ways which are financial engineering, earning enhancement and external factors. Private equity is beneficial for companies in progress since it offers to alter in management, disposal of unprofitable business and cost cutting, also contributes to arise new products.

How does exit strategy work in Private Equity?

Nowadays, majority of capital markets can encounter challenges in terms of financial and practical reasons. Exit routes are possible to sale via equity markets and self liquidating instruments which means convertible debt or redeemable preference shares. In addition to this, there is sale of shares to management and leveraged refinancing or another option is secondary sale to other PE firms. Under these circumstances, making the decision play a crucial role in private equity exit strategies because the owner's exist become to determine best exit strategy and right type of buyer. Moreover, finding the right buyer can be second option how their value rivers fit the seller's personal and financial goals. Providing that these factors cannot works, there will be preparing for life after the deal since they need to find right way how to protect and transfer the wealth generated by the exit from their business. There is controversial issue for the best choice in the private equity company owner because exit strategy will depend on distinctive factors such as personal goals, financial need of the owner and the business, the state of the industry to name a few.

The Pros and Cos for Exit Strategy in PE

In order to find the right way, making decision has a powerful influence on exit strategy since the right buyer is prominent to determine the exit strategy so that it will best accomplish purposes. Due to the fact that full or partial sale to a third party with or without an auction can be useful way. Other options involve in corporate partnership, joint venture. Additively, selling the company to employees and transferring ownership to family members and an initial public offering. Particularly, initial public offering has both adverse and favorable results because going public can allow an owner to free up merely a portion of the personal wealth which is tied up in the company. In the market structure, there two types of buyers which are strategic and financial buyers. To begin with, strategic buyers may provide highest valuation for shareholders and potential operating association may develop the business as they are knowledge in terms of operational and business perspectives, so they are able to close much faster than financial buyers. On the contrary, strategic buyers can pose a problem because their management can lose autonomy and lose their jobs, so this circumstance impact customer loyalty. Secondly, financial buyers have advantages for current management because it sustains important involvement in direction and operation of the business and also can provide owner with ability to notice additional returns, yet this can bring negative results. In regard to this, heavy debt requirement can limit capital available for growth.

New Funding Opportunity: Bridge Financing

Bridge financing system has prominent role when private equity exit strategies are incapable of initial public offering since bridge financing is a method of financing so as to maintain liquidity in the course of waiting for anticipated and reasonably expected inflow of cash. Especially, bridge financing is become to more popular in initial public offering (IPO) because it is used by companies before their IPO in order to receive essential cash for maintenance of operations. As a result of this, bridge financing enable funders to secure their cost during IPO and this new system is attractive for new investors in terms of security how finance costs. This strategy has fewer risks since bridge financing system enable funders to protect final costs and this period covers approximately between one and three years. Bridge financing system is important finance tool in Turkey and enables investors to increase rate of private equity and make room for new investment projects, so the rate of investment projects rises via bridge financing method and there is crucial method for investors as bridge financing is major opportunities in terms of less risk in the new investment projects.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.