The Energy Market Regulatory Authority Imposed a Capital Increase Requirement for Share Transfers That Will Change the Shareholding Structure of Legal Entities Holding Pre-license with Foreign Partners
The Electricity Market Law No. 6446 and the Electricity Market License Regulation prohibit any change in the shareholding structure of the pre-license holder legal entity during the term of the pre-license and stipulates that the pre-license will be canceled in case of violation of the prohibition. The situations that constitute an exception to the rule that the shareholding structure cannot be changed directly or indirectly are listed in the first paragraph of Article 57 of the Electricity Market License Regulation as fourteen subparagraphs and it is regulated that the shareholding structure may be changed during the preliminary license in accordance with these fourteen situations.
However, with the provision “However, direct shareholding changes planned to be made in other subparagraphs except for subparagraphs (a), (b), (ç), (d), (f), (j) and (k) and indirect shareholding structure changes of 10% and above are subject to the approval of the Board each time”, a permission requirement has been introduced for certain changes in shareholding structure, which are listed as exceptions to the prohibition, in the form of obtaining prior Board approval.
With the Board Decision dated 07/11/2024 and numbered 12993 published in the Official Gazette dated 09/11/2024 and numbered 32717, the Energy Market Regulatory Authority (“EMRA”) has issued the Board Decision dated 07/11/2024 and numbered 12993 within the scope of the “Indirect shareholding changes in the shareholding structure of a legal entity holding a pre-license due to changes in the shareholding structure of the partners established abroad” regulated in the first paragraph (c) of the Electricity Market License Regulation;
in the event of a change in the shareholding structure of the pre-license holder legal entity, the minimum capital of the pre-license holder legal entity must also be increased.
Accordingly, the paid-in capital of the pre-licensed legal entity shall be increased by 25% of the total investment amount related to the main source, in addition to the existing paid-in capital and regardless of the share transfer rate, within six months from the date of notification of the board decision regarding the approval of the share transfer, and the relevant information and documents shall be submitted to EMRA.
In the calculation of the amount of paid-in capital, the unit investment amounts on the basis of resource for the main resource are determined on the basis of mechanical installed capacity (MWm) as shown in the table below:
In the event that the share transfer transactions subject to approval are realized, if the capital increase obligation is not realized within the specified period, the approval will be deemed invalid and the preliminary license will be canceled within the scope of Article 57 of the Electricity Market License Regulation.
On the other hand, the increased capital amount cannot be reduced below the specified amount until the generation license is obtained, otherwise the approval will be deemed invalid and the preliminary license will be canceled within the scope of Article 57 of the Electricity Market License Regulation.
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However, with the provision “However, direct shareholding changes planned to be made in other subparagraphs except for subparagraphs (a), (b), (ç), (d), (f), (j) and (k) and indirect shareholding structure changes of 10% and above are subject to the approval of the Board each time”, a permission requirement has been introduced for certain changes in shareholding structure, which are listed as exceptions to the prohibition, in the form of obtaining prior Board approval.
With the Board Decision dated 07/11/2024 and numbered 12993 published in the Official Gazette dated 09/11/2024 and numbered 32717, the Energy Market Regulatory Authority (“EMRA”) has issued the Board Decision dated 07/11/2024 and numbered 12993 within the scope of the “Indirect shareholding changes in the shareholding structure of a legal entity holding a pre-license due to changes in the shareholding structure of the partners established abroad” regulated in the first paragraph (c) of the Electricity Market License Regulation;
- Changes in the shareholding structure of a legal entity holding a pre-license by 10% or more by acquiring new shareholders within the scope of “Indirect shareholding changes in the shareholding structure of a legal entity holding a pre-license due to changes in the shareholding structure of shareholders established abroad” regulated in subparagraph (c),
- Share transfer to foreigners within the scope of “Direct or indirect share changes that do not constitute a change of control in the shareholding structure of the pre-license holder legal entity” regulated in subparagraph (g),
- Amendment within the scope of “Direct or indirect share acquisitions realized in the pre-license holder legal entity by using foreign resources by legal entities established abroad or legal entities controlled by these legal entities and established within the scope of Turkish Commercial Code No. 6102” regulated in subparagraph (ı)
in the event of a change in the shareholding structure of the pre-license holder legal entity, the minimum capital of the pre-license holder legal entity must also be increased.
Accordingly, the paid-in capital of the pre-licensed legal entity shall be increased by 25% of the total investment amount related to the main source, in addition to the existing paid-in capital and regardless of the share transfer rate, within six months from the date of notification of the board decision regarding the approval of the share transfer, and the relevant information and documents shall be submitted to EMRA.
In the calculation of the amount of paid-in capital, the unit investment amounts on the basis of resource for the main resource are determined on the basis of mechanical installed capacity (MWm) as shown in the table below:
In the event that the share transfer transactions subject to approval are realized, if the capital increase obligation is not realized within the specified period, the approval will be deemed invalid and the preliminary license will be canceled within the scope of Article 57 of the Electricity Market License Regulation.
On the other hand, the increased capital amount cannot be reduced below the specified amount until the generation license is obtained, otherwise the approval will be deemed invalid and the preliminary license will be canceled within the scope of Article 57 of the Electricity Market License Regulation.
For further information and support, please contact us at info@lbfpartners.com.
LBF Partners Law Firm
