• United Bank plans to list a 30% stake on the EGX, marking a major step in Egypt’s privatization efforts.
  • The IPO must complete all regulatory approvals from the Financial Regulatory Authority and EGX within six months.
  • Key shareholders are required to retain at least 51% of their holdings for two years, stabilizing equity post-listing and boosting investor confidence.

United Bank of Egypt (UBE), owned by the Central Bank of Egypt, has announced plans to float 30% of its shares (330 million) on the Egyptian Exchange (EGX). The initial offering is expected to be concluded before the end of the year.

This accelerated move by UBE follows the EGX’s recent approval of a temporary listing of 1.1 billion shares at EGP 5 per unit. The decision to go public reflects Egypt’s strong push for market liberalization.

The offering’s completion within six months is mandated by the EGX. CI Capital is the offering’s global coordinator and Baker McKenzie’s Cairo office provides legal counsel.

Regulatory Approval Process and Market Strategy

The bank’s debut hinges on approvals from the Financial Regulatory Authority (FRA) and EGX.

United Bank must adhere to specific clauses of Article 7. This means completing registration procedures and ensuring proper documentation for the institutional and retail offerings.

These stringent guidelines underscore Egypt’s focus on enhancing transparency and investor confidence in the market.

Shareholder Obligations and Listing Compliance

Per EGX’s rules, key shareholders must retain a minimum of 51% of their shares for two years post-listing. The measure is aimed at preserving stability within the bank’s equity structure.

Should major shareholders’ retained shares fall below 25%, other board members or shareholders must fill the gap.

This stipulation, part of EGX’s commitment to orderly equity markets, establishes a robust framework for UBE’s IPO. Thus, ensuring minimal fluctuations during the initial trading phase.

United Bank Positions for Competitive Advantage

This strategic IPO places United Bank ahead in Egypt’s evolving financial market, particularly as Egypt aims to modernize its banking landscape.

UBE’s anticipated listing could attract substantial investor interest, bolstering its capital base amidst strong sectoral competition.

In turn, this aligns with Egypt’s privatization goals and may position United Bank as a formidable competitor by increasing its share visibility and market liquidity.

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