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Tuesday, 7 February 2023

Capital increases for listed companies are going to be easier and faster

A streamlined capital increase process: The Financial Regulatory Authority (FRA) has amended rules governing capital increases in a bid to make it easier for EGX-listed firms to raise fresh capital, the FRA said in a statement yesterday.

Faster approvals: The FRA has brought in stricter timelines that the regulator says should shave up to 37 working days off the approval process.

  • Companies now have two working days to disclose capital increase plans after the FRA approves them. There had previously been no time limit on when companies should disclose FRA approval.
  • Companies must notify shareholders of meetings to approve capital increases seven days in advance, down from a previous 21 days.
  • Existing shareholders will have seven days to subscribe to a capital increase before the shares are offered on the EGX, down from 14 days previously.

Companies can now carry out capital increases in phases, provided that the total capital increase doesn’t exceed the company’s current issued capital.

All part of efforts to revive the EGX: Authorities are working to stimulate investment on the bourse which is currently enjoying one of its strongest rallies in years on the back of the EGP devaluation. The government is preparing to reboot its state privatization program which will see fresh IPOs on the EGX and is considering a temporary waiver on capital gains tax on stock trades.

SPEAKING OF CAPITAL INCREASES- The FRA yesterday approved CIB’s request to increase its issued and paid-up capital by 0.66% to almost EGP 30.2 bn, it said in a statement (pdf) to the bourse. The capital increase will be distributed over 20.44 mn shares.

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