Thursday June 2 2016

News Source: Global Disclosures

Focus: Takeover and Acquisition

Type: General

Country: Egypt




The Egyptian Financial Supervisory Authority (EFSA) board has approved cases which are exempted from submitting a mandatory tender offer pursuant to the Executive Regulations of Capital Market Law.

In decision no. 54 of 2016, the EFSA have stipulated that they may exempt three additional cases of listed companies or IPO companies from submitting a mandatory tender offer in accordance with Part XII of the Executive Regulations of the Capital Market law. The new exemptions are as follows:

  • Obtaining approval of all shareholders to acquire any portion of the company’s capital and ensuring they do not have any objections;
  • Cases of transferring the whole ownership of the shares owned by employee shareholders’ associations in subsidiaries of the holding companies owned by the state to restructure these companies; and
  • Any person acting alone or in concert, who acquires a shareholding exceeding 50% of the shares of an entity, who owns more than 33% of the shares or voting rights in listed companies or an IPO. (Provided that the persons have contributions in other companies other than the listed company, and that the book value of these contributions and assets are more than 50% of the book value of the entity’s total assets).

These recently approved exemptions are in addition to existing exemptions provided for in the Executive Regulations of Capital Market law, which include:

  • The assignment of shares;
  • Cases of inheritance or goodwill;
  • Merging in accordance with the provisions of the law; and
  • Banks which sell their encumbered securities to meet obligations.

The EFSA has also clarified that pursuant to decision no. 47 of 2016, relating to amendments to some articles of listing and delisting rules with regard to disclosures, listed companies are obliged to notify the stock exchange of any lawsuits, arbitration or sentences related to its activity (or other owned assets) that affect the financial position of the rights of shareholders. The notification shall include sentences which have been issued to pay sums of money which exceed 2% of the entity’s equity rights according to the latest financial statements.

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