In a historic move, UAE Federal Law 1 of 1991 has been amended by Federal Decree by Law no. 3 of 2015 and new Articles of Association have been issued by the UAE Cabinet of Ministers.
The new regime introduces momentous changes, including the possibility of foreign investors owning shares in Etisalat Group and Etisalat’s legal name will change to Emirates Telecommunications Group Company PJSC, but continue to be known as Etisalat Group.
The changes permit legal/judicial persons wholly-owned by UAE nationals to hold shares in the company. Also, non-national individuals and entities may own up to 20 per cent of Etisalat Group’s shares, subject to the approval of the Etisalat Group Board of Directors.
However, restrictions in respect of voting rights shall be applied to the shares owned by non-nationals and such shares shall not hold any voting rights at Etisalat Group’s general assembly (however, holders of such shares may attend general assembly meetings).
Commenting on the changes, Eissa Al Suwaidi, Chairman, Etisalat Group said: “I wholeheartedly welcome the Federal Decree and praise the Government for their leadership and support of the telecommunication sector. The approval to allow institutional and foreign ownership of Etisalat Group’s equity is another significant milestone in the history of Etisalat Group. It will have a positive impact for both Etisalat Group’s shareholders and the Stock Exchange. It also sends out a strong signal that the UAE is open for business and will enhance Etisalat brand recognition around the world.”
In addition to ordinary shares, a “Special Share” will be issued to the Federal Government of the UAE (the “Special Shareholder”), pursuant to the approval of Etisalat Group’s Board of Directors. Etisalat Group will also be entitled to issue different classes of shares. Other than the issuance of the Special Share, Etisalat Group does not intend to issue any additional shares at this time.
Ahmad Julfar, Group Chief Executive Officer, Etisalat added: “This is a historical moment for Etisalat which will allow us to build on the years of success the company has enjoyed and provide additional impetus in our pursuit of excellence in all that we do. It will enable Etisalat to continue to invest in the innovative products and services, which our customers demand and are vital in the highly competitive global telecommunications sector. As a result I am confident that Etisalat will go from strength to strength and continue delivering long-term value to our shareholders.”
Some of the other material changes, include the ability for Etisalat Group to establish a new operating company for the purpose of operating its telecommunications network business and providing telecommunication services in the UAE, subject to Special Shareholder approval; and establishing a share buyback program at any time in accordance with the conditions and procedures set out in the relevant law and subject to the prior approval of the Emirates Securities and Commodities Authority.
In accordance with the New Law, Etisalat Group will carry out the procedures required to implement and align its status with the provisions of the New Law within one year from the date of its issue.