Companies may need financial resources in order to carry out their production and sales activities efficiently. As of their current situation, the financial needs of companies are met from sales revenues, and in cases where sales revenues are insufficient, they are met with interest-bearing borrowed money from financial institutions. As the financial resource cannot be carried out with continuous interest borrowed money, imposing a large financial burden on companies due to the interest applied also causes companies to increase their losses much more including capital loss. Therefore, company debts must be paid as soon as possible. This situation makes it necessary to increase the capital.
Another issue is that the investments to be made in order for companies to keep up with technological developments, to expand their product range and to compete with competitors can be realized as a result of meeting the financial need.
Another issue is the need for ready resources to prevent payment difficulties when companies need to pay severance payments for employees who are likely to retire in the future.
The low-cost financing needs of companies can be met with a low-interest and long-term resource. However, since it is not possible to obtain such a resource due to the financial structure of companies, increasing the capital within the registered capital ceiling is seen as the most rational solution in order to generate equity at the lowest cost.
Thanks to capital increases, the company can provide the financing it needs without cash outflow from the company instead of using high interest or short-term loans. The company can also increase its capital with the basic capital increase in the fixed system or with the registered capital system.
However, in the fixed system, the decision making body for the basic capital increase is the general assembly. The meeting of the general assembly is possible with a difficult and many formalities. In the registered capital increase, which is a solution to this problem, the General Assembly transfers the capital increase, which has the exclusive authority, to the Board of Directors. The allocated capital increase, which is the subject of our opinion, is a capital increase method regulated for the first time in Turkish law with the law numbered 6102.
Our perusal has been prepared within the framework the Capital Markets Law No. 6232 and the relevant communiqués of the Capital Markets Board (Registered Capital System Communiqué (II-18.1), Share Communiqué (VII-128.1), Prospectus and Issue Document Communiqué (II-5.1) and Special Cases Communiqué (II -15.1)) and the provisions of the Turkish Commercial Code No. 6102 and the Law No. 4054 on the Protection of Competition and the BIST Wholesale Transactions Procedure and the BIST Quotation Fee Tariff.
1- What does allocated capital increase mean?
Public corporations (excluding those who raise money through crowdfunding platforms, joint stock companies whose shares are offered to the public or deemed to have been offered to the public) is a paid capital increase by making sales of capital market instruments allocatedly outside the stock exchange or wholesale on the stock exchange directly to residents abroad and / or domestically without being offered to the public.
Share sales to be made through conditional capital increase are also in the nature of allocated selling.
2- Which companies can take a allocated capital increase decision?
Except for those who raise money through crowdfunding platforms, joint stock companies whose shares are or are deemed to have been offered to the public and whose shares are traded on the stock exchange or not, may decide to increase their capital.
3- Which is the decision-making body in allocated capital increase?
According to the provisions of the Registered Capital System Communiqué (II-18.1);
In the registered capital system, the board of directors is authorized to increase the capital up to the registered capital ceiling determined in the articles of association, without being bound by the provisions of the TCC regarding increasing the basic capital.