The Egypt Financial Regulatory Authority issued amendments to its rules governing listed-company delisting processes and approvals for share splits, and introduced additional requirements for mergers between a listed company and an unlisted company where the unlisted company’s net asset value exceeds the listed company’s market capitalisation. The changes set a maximum of 25 working days from the general assembly decision to complete final delisting and the purchase of affected shareholders’ shares, allowing purchases to be executed daily under stock exchange rules. For in-scope listed–unlisted mergers, the amendments require obtaining the final report assessing the merging companies’ assets and liabilities from the competent administrative authority and approval by an extraordinary general assembly, and they require a disclosure report to be published before trading starts alongside compliance with continued listing and valuation requirements based on a fair value study. If a merger results in a capital increase and the listed company ceases to meet one or more continued listing conditions, it must restore them within six months of completing the merger procedures and listing the new shares. The rules also introduce a stable-ownership condition for subscribers in a merger-related capital increase, requiring a one-financial-year holding period from listing of the new shares and the issuance of annual or periodic financial statements meeting profitability and shareholders’ equity conditions, and they require a SPAC to freeze 51% of such subscribers’ holdings for at least 12 months in specified circumstances. Separately, the amendments add quantitative and qualitative criteria the Authority will use when deciding whether a company can proceed with a share split, and they tighten requirements around listed companies’ disposal of assets and investments by specifying valuation based on consolidated financial statements where available and clarifying the required type of valuer depending on the asset being sold.
Egypt Financial Regulatory Authority 2025-02-17
Egypt Financial Regulatory Authority amends listed-company delisting, merger and stock-split rules with a 25-working-day delisting cap and new lock-ups
The Egypt Financial Regulatory Authority amended rules on delisting, share splits, and mergers for listed and unlisted companies. Key changes include a 25-day maximum for delisting, new requirements for asset and liability assessments in mergers, and conditions for capital increases and stable ownership. The amendments also introduce criteria for share splits and tighten asset disposal requirements based on consolidated financial statements.