Prospectus Preparation is a fundamental step for any company wishing to make a public offer of securities (stocks or bonds) in Georgia. A prospectus is not merely a marketing document; it is a liability document that details the issuer's financial condition, risks, and future plans. The National Bank of Georgia, as the capital market regulator, imposes strict requirements on the content and format of the prospectus. An incorrectly drafted or incomplete prospectus can lead to the failure of the issuance, regulatory fines, or litigation from investors. This service involves full legal support for issuers during the drafting, approval, and publication of the prospectus to ensure full compliance with legislation and investor confidence.
What Does the Prospectus Preparation Service Cover?
Capital market lawyers on our platform offer comprehensive services covering all stages of issuance:
- Legal Due Diligence: Examining the issuer company's legal status to identify information that must be disclosed in the prospectus.
- Prospectus Drafting: Composing the prospectus in accordance with the Law on Securities Market and National Bank regulations, including the formulation of risk factors.
- Preparation of Final Terms: Legally formalizing the specific conditions of bonds or shares (interest rate, maturity, price).
- Regulatory Relations: Submitting the prospectus to the National Bank of Georgia for approval, answering queries, and adjusting the document.
- Listing Support: Preparing documentation required for the admission of securities to the Georgian Stock Exchange.
Common Scenarios and Practical Needs
Prospectus preparation is necessary for various types of transactions:
- Corporate Bond Issuance: A company wants to raise funding as an alternative to bank loans and issues bonds to the general public.
- Initial Public Offering (IPO): A company goes public and offers shares to investors, requiring the most detailed and transparent prospectus.
- Private Placement: Although a public offer is not made, investors (e.g., International Financial Institutions) often require an Information Memorandum similar to a prospectus.
- Base Prospectus: For large issuers planning serial bond issuances over a specific period.
Georgian Legal Framework
Prospectus preparation is regulated by the Law of Georgia on Securities Market and the Decree of the President of the National Bank "On the Rule for Approval and Publication of the Prospectus for Public Offer of Securities". Legislation strictly defines what information must be disclosed: financial statements, governance structure, key risks, and terms of the security. It is important to note that including false or incomplete information in the prospectus results in joint liability of the issuer and its management board members towards investors.
Service Process: What to Expect
The process begins with forming a working group including lawyers, financial advisors (Underwriters), and auditors. The lawyer coordinates information gathering and drafts the non-financial parts of the prospectus. Special attention is paid to describing risks to protect the issuer from future claims. After drafting, it is sent to the National Bank. Following the receipt and reflection of NBG comments, the prospectus is approved and made public.
Why Choose Legal.ge?
Prospectus preparation requires specific experience in capital markets law. Mistakes here are costly. Legal.ge connects you with lawyers who have a successful track record in bond and share issuances in Georgia. Our specialists ensure that your prospectus is not only legally compliant but also clear and attractive to investors.