Dubai:
Etisalat said on Wednesday foreign investors (FIs) will be allowed to hold up to 20 per cent of its shares, but these investors won’t have any voting rights.
So far, Etisalat, the largest company in terms market value in the country, allows only local investors to own 40 per cent in the company, the remaining 60 per cent is held by the Emirates Investment Authority (EIA).
But in June, the company ended the monopoly of the local investors over the stock, by allowing foreigners to hold 20 per cent stake, and approved of more details after the amendments to its Articles of Association.
“One way to limit voting rights would be to issue certificates, as we have seen in Europe, such as with the privatisation of ABN AMRO. The increase in foreign ownership has unlocked value for shareholders, lowered the cost and capital and this should create strategic and financial flexibility for Etisalat,” Jaap Meijer, managing director, research at Arqaam Capital told Gulf News.
Special share:
Etisalat will also issue special share to the federal government, granting them powers to approve and veto key decisions of the group. This could include an employee share option plan, approving merger and allowing participation of strategic investors.
Etisalat’s formal name will be amended to Emirates Telecommunications Group Co, after the articles of association also included for conversion of the corporation to a public joint stock company.
