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Wednesday, 7 February 2018

Saudi shareholders file complaint with GAFI over GM Egypt capital increase plans

Saudi shareholders in General Motors Egypt have reportedly rejected a board decision to increase the company’s issued and paid-in capital by EGP 1.78 bn to EGP 1.99 bn, from EGP 219.8 mn currently, according to Daily News Egypt. The General Authority for Freezones and Investment (GAFI) agreed to freeze Saudi Arabia’s Kaaki family’s 14.7% stake in GM, after they lodged a formal complaint asking that the board’s decision be investigated. The family also filed a lawsuit at the State Council (Maglis Al Dawla), according to lawyer Atef Al Sherif, who explained that the move would have come “at the expense of the minority that will not be able to subscribe to the sudden increase in capital.” GM Egypt had planned to issue new shares at a nominal price of EGP 840/share, that would be paid in cash in USD to help offset the decline in performance last year as a result of an overall drop in Egypt’s auto industry. GM Egypt, a joint venture with the Mansour family, has refused to comment on the case, the newspaper says.

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