Highlights

The Financial Regulatory Authority (the “FRA”) recently issued Decree No. 11 of 2023 (the “Decree”), which amends the EGX listing and delisting rules. The Decree went into effect on 26 January 2023.

Scope of Application

The amendments included in the Decree focus on the following:

1. reducing the time required for companies to amend their issued capital;
2. listing unrated bonds and Sukuk bonds; and
3. regulating the disposal of treasury stock.

The amendments aim to streamline capital increase procedures, improve the trading of unrated bonds, and make the distribution of treasury shares more efficient.

Concerned Entities

Listed companies, bonds and Sukuk issuers are the entities affected by the amendments.

Key Provisions

• The Decree provides flexibility through enabling Board decision to increase the company capital on tranches based on the EGM pre-authorization to complete such an increase subject to a set of conditions, including, among others, maximum of issued capital must not exceed its equity, all tranches must be executed within 3 years of the EGM pre-authorization.
• The Decree sets a deadline for submitting disclosure reports to the FRA for review and publication to protect shareholders better.
• The Decree enables and regulates the disposal of treasury shares by listed companies through distribution to shareholders as coupon shares.
• The Decree permits the trading of non-rated bonds with disclosure publication, provided the value does not exceed the value of the company's net assets, and the bonds are limited to qualified investors.

Specific Time Frames

1. The company’s Board of Directors must send the disclosure report to the FRA for approval within two working days of convening.
2. The company must call for a General Assembly to decide on the capital increase or change in company purpose or par value within 7 (seven) working days from the day of the disclosure upon approval from FRA.
3. The minimum time between the announcement and the final trading date of shares bearing rights must be 7 (seven)days.