FRA Clears Ezz Steel Delisting; 75% Minority Vote Required, Main Shareholder Excluded
The Financial Regulatory Authority (FRA) has confirmed that there are no objections to Ezz Steel’s (ESRS) plan to proceed with its voluntary delisting from the Egyptian Exchange (EGX). The company’s request, supported by a disclosure report approved by the Board of Directors on December 7, 2024, was submitted to the FRA on December 8, 2024. The FRA has outlined specific conditions that must be met for the process to move forward, including publishing the disclosure report on EGX trading screens and adhering to required procedures before calling the Extraordinary General Assembly (EGA) to vote on the delisting.
The FRA outlined key conditions for the process:
Fair Value Disclosure: The independent financial advisor’s report, detailing the fair value of the shares, must be published on EGX screens at least 15 days before the Extraordinary General Assembly (EGA). Shareholders must have access to the report at the company’s headquarters.
Voting Restrictions: Only minority shareholders (free-floating shares) will vote on the delisting, with approval requiring 75% support from attending minority shareholders. Shares held by the principal shareholder and related parties are excluded from voting.
***Unofficial English Summary Translation***
FRA Disclosure
Chairman and Managing Director
Ezz Steel Company
Greetings,
The Financial Regulatory Authority (FRA) has confirmed that there are no objections to Ezz Steel’s (ESRS) plan to proceed with its voluntary delisting from the Egyptian Exchange (EGX). The company’s request, supported by a disclosure report approved by the Board of Directors on December 7, 2024, was submitted to the FRA on December 8, 2024. The FRA has outlined specific conditions that must be met for the process to move forward, including publishing the disclosure report on EGX trading screens and adhering to required procedures before calling the Extraordinary General Assembly (EGA) to vote on the delisting.
First: The EGA meeting must not take place unless the executive summary of the independent financial advisor’s report, which includes the fair value of the share for the purpose of voluntary delisting, is published on the EGX screens at least fifteen (15) days prior to the meeting. This summary and the accompanying documents must also be made available to shareholders at the company’s headquarters for review at least fifteen (15) days prior to the EGA, in accordance with Article (228) of the Executive Regulations of Law No. 159 of 1981. If these requirements are not fulfilled, the EGA meeting must be postponed until the documents are made available to shareholders.
It is essential to ensure that the executive summary of the fair value study and the draft resolutions to be presented to shareholders are available at least fifteen (15) days before the EGA meeting.
Second: Voting on the agenda items of the EGA related to the voluntary delisting shall be limited to minority shareholders (free-floating shares), excluding shares held by the principal shareholder and related parties. Shareholders must also be provided with the option of physical attendance.
The resolution for approving the voluntary delisting shall require the approval of at least 75% of the shares held by minority shareholders (free-floating shares) who are present and eligible to vote, excluding related parties and the principal shareholder. This is in line with the second paragraph of Article (55) of the EGX listing and delisting rules, which stipulates that dissenting shareholders holding up to 10% of the company’s shares retain their voting power, regardless of their reasons for objection.
The company also affirmed that the voluntary delisting decision is being taken in light of low liquidity levels, which have ranged between 2.9% and 4.7% during trading years from 2018 to 2024.
Third: The company must complete all the necessary procedures for the voluntary delisting with the EGX, in compliance with Article (55) (repeated) of the EGX listing and delisting rules, in addition to Article (74) of its Executive Regulations.
Fourth: The shareholder requesting the voluntary delisting must seek an exemption from submitting a mandatory tender offer (MTO), in accordance with Clause (C), Paragraph 2, of Article (55) of the Executive Regulations of Law No. 95 of 1992. This exemption must be sought immediately after the issuance of the EGA resolution approving the voluntary delisting and the purchase of dissenting shareholders’ shares, ensuring this takes place prior to the execution of the share purchase process.
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