The Egypt Financial Regulatory Authority has amended the Egyptian Exchange’s listing and delisting rules to introduce a more flexible regime for special purpose acquisition companies (SPACs), including changes to permissible acquisition structures and the conditions under which SPAC shares can trade to the public after completing an acquisition. The amendments add acquisition by merger alongside acquisitions via share swaps and credit balances, with the chosen mechanism to be disclosed in the information memorandum submitted at listing. Post-acquisition, subscribers in a SPAC capital increase may trade their shares at the subscription price representing fair value, rather than at nominal value, after publication of a disclosure report, with fair value determined by an independent financial adviser registered with the authority. Public trading of SPAC shares is permitted after acquisition provided shareholder-number and free-float requirements are met through either a prospectus or a disclosure report for trading, and shares may be traded via direct trading. The prior requirement for two years of annual financial statements is replaced by an obligation to publish six-month post-acquisition financial statements showing a 5% net profit and shareholders’ equity at least equal to paid-up capital, prepared under Egyptian Accounting Standards and subject to a limited review by a registered auditor. Lock-up requirements are also eased so that the 51% retention condition applies to SPAC founders and board members, and to board members and managers of acquired companies only to the extent they subscribe in the SPAC’s capital increase in exchange for their shares, rather than applying a 100% restriction. Separately, founders and principal shareholders of small and medium-sized companies are exempted from continuing a third year of stable ownership if they transfer the company’s shares to the main market.
Egypt Financial Regulatory Authority 2025-02-17
Egypt Financial Regulatory Authority amends listing rules to broaden SPAC acquisition methods and allow public trading after a six-month post-acquisition track record
The Egypt Financial Regulatory Authority revised the Egyptian Exchange’s listing and delisting rules for a more flexible SPAC framework. Changes include allowing acquisitions by merger, adjusting post-acquisition trading conditions, and easing lock-up requirements for SPAC founders and board members. Founders of small and medium-sized companies are exempt from maintaining a third year of stable ownership if transferring shares to the main market.