In the November 2014 announcement that Turkey's largest
natural gas distributor, IGDAS, would be privatized, it was
expected that the tender would take place in the form of a
block sale. In his latest press statement, however, the Mayor of
the Istanbul Metropolitan Municipality, Kadir Topbas, announced
that, instead of a block sale, an initial public offering
("IPO") would soon be initiated and that
IGDAS' shares would first be offered to natural gas consumers
in Istanbul in the context of an IPO.
IGDAS is the largest natural gas distribution company in Turkey in
terms of customers (5.1 million) and consumption and, thus, is
expected to generate significant interest among local and
Under Turkish securities laws, the following limitations apply
with respect to the distribution of shares in a public
Shares representing at least 30% of the nominal value of the
issuance must be allocated to domestic investors: at least 10%
allocated to domestic retail investors and at least 20% to domestic
Once the minimum 30% has been offered to domestic investors,
the remaining 70% may be allocated among different groups of
domestic and international investors, provided that these groups
are defined in the offering documents.
The major difference in converting from a block sale to a public
offering is that privatization through a public offering is
regulated under the Capital Markets Law and related regulations.
Since the capital markets regulations impose certain procedural
steps, such as applying to the Capital Markets Board for approval
of the offering circular and to the Istanbul Stock Exchange
for quotation on the relevant market, converting to a public
offering will extend the privatization period.
As we mentioned in our previous
legal alert on November 7, 2014, the draft Natural Gas
Market Law, which is still under parliamentary commission review,
includes provisions and exemptions intended to increase
bidders' appetite for IGDAS' privatization. The two major
benefits under the draft Natural Gas Market Law -- fixed usage and
transportation fees for 10 years and exemptions from cumbersome
obligations -- will not be affected by a change in the method of
Given the recent return of political stability and
predictability in the market and the fact that IGDAS's
privatization had been expected to conclude earlier this year, we
expect the enactment of the law and the commencement of the
privatization process to gain speed. Uncertainty, however, as to
whether the Istanbul Municipality or the Privatization Authority
will be in charge of conducting the tender will remain until the
tender is officially announced.
Please do not hesitate to contact our team, highly experienced
in privatizations and IPOs, if you have any questions about the
privatizations currently underway and their tender procedures.
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.
A trustee in bankruptcy's rights to obtain a possession order and order for sale against a bankrupt's property will not be suspended indefinitely even where there are exceptional circumstances.
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”
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).