29/10/2023
Egypt allows establishment of S**Cs to facilitate acquisitions
Egyptian financial regulatory authority has agreed to allow the establishment and licensing of S**C.
FRA Chairman Mohamed Omran said the authority’s decision reflects its interest in creating financing solutions that would facilitate the access of investors, especially small and medium-sized companies, to financing in order to support Egypt’s Vision 2030.
S**C is a Special purpose Acquisition Company, it’s a company without Commercial operation and is formed strictly to raise capital through an initial public offering (IPO), for the propose of acquiring or merging with an existing company (the target company) known as “blank check companies ".
According to FRA, S**C obtain the required financing by offering shares through public subscription and/or a private offering, and the proceeds of the subscription are kept in a bank account under specific conditions until the required acquisition is made within the time period of up to two years.
If the planned acquisition is not carried out then the S**C will be liquidated and obligated to return the funds to the investors, after deducting the prescribed commissions and other expenses.
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