The United Arab Emirates on Wednesday gave permission for foreign investors to buy shares in Etisalat.
The government has amended the telco’s articles of association to allow non-national individuals and entities to acquire up to 20% of its shares. Etisalat has also changed its legal name to Emirates Telecommunications Group Company.
"The approval to allow institutional and foreign ownership of Etisalat Group’s equity is another significant milestone in the history of Etisalat Group," said Etisalat chairman Eissa Al Suwaidi, in a statement. "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 U.A.E. is open for business and will enhance Etisalat brand recognition around the world."
However, it seems that foreign investors will hold little sway in Etisalat’s strategic direction.
Any purchases are subject to approval by the board, and while foreign stakeholders will be admitted to general meetings, their shares will not grant them any voting rights.
In addition, the U.A.E. government will retain what Etisalat calls a "special share" in the company. This grants it veto rights over key decisions including mergers and acquisitions, approving ownership of more than 5% of Etisalat by a single shareholder, and allowing the U.A.E.’s shareholding to fall below 51%.
"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," said Etisalat CEO Ahmad Julfar.
