Non-UAE investors will be allowed to own up to 20 per cent of shares
- Etisalat will convert to a public joint stock company
- Firm will not grant voting rights to foreign owners and institutions
The share price for UAE-based telecoms company Etisalat increased 0.74 per cent to reach AED13.5 ($3.7) on 19 August, its highest in 14 days, on the back of news that non-UAE investors would be able to purchase stock in the company.
Etisalat has amended its incorporation article to allow up to 20 per cent ownership to foreign individuals and institutions, announced on 18 August, which is understood to have prompted the uptick in its share price.
Foreign shareholders, however, will not be granted voting rights when Etisalat releases its shares to non-UAE investors.
The UAE cabinet had earlier approved the firms articles of association and a related federal law, paving the way for its conversion from a corporation to a public joint stock company. This is expected to lead to Etisalats inclusion in US-based MSCIs emerging market index.
The federal government, which owns 60 per cent of Etisalat through sovereign wealth fund Emirates Investment Authority, will be issued with a special share, the company said. This will grant the government veto rights over key decisions such as changes to Etisalats share capital, rights attached to shares, approval of a merger with another company, participation of a strategic investor and allowing the governments stake to fall below 51 per cent.
The company has one year from the amendment of the federal law to implement the agreed changes.