Suspension of Pre-emptive Rights in Connection with Capital Increases

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The Capital Market Authority (the CMA) approved CE amendments to the Rules on the Offer of Securities and Continuing Obligations (the ROSCOs).The amendments to the ROSCOs include the introduction of a new structure for listed companies to increase their capital while suspending the pre-emptive right of shareholders to subscribe to such capital.

New Capital Increase Structure

The new structure allows listed companies to issue new cash shares while suspending the pre-emptive right for shareholders. This option existed in the Companies Law for joint stock companies, including listed companies. However, the CMA rules did not regulate the process and requirements that need to be satisfied for listed companies to utilize this option.

‍This new structure is not a rights issue (i.e., no tradeable ‘rights’ will be issued), but it rather allows listed companies to directly issue and offer new cash shares to one or more investors(e.g., a strategic investor).

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