GAFI Circular with Rules for Compan

The General Authority for Investment and Free Zones (“GAFI”) recently published Circular No. 30 of 2019 (the “Circular”)[1] on its website, with the regulations on capital increases in joint stock companies and partnerships limited by shares. Overall, the Circular does not add new rules, but rather reiterates already existing ones with regards to capital increases in the Companies Law (particularly Articles 32 and 33), its Executive Regulations (particularly Articles 96-99), and the Executive Regulations of the Capital Market Law (particularly Articles 30-33). Yet the Circular gives special emphasis to the following:

• The lapsing of a rights issue if its owning shareholder does not subscribe in the first round of subscription in the increase.

• The possibility of wavering the rights issue in capital increases through private subscription (for specified persons or entities) if this is provided for in the company bylaws and if all the shareholders approve of this and given that the shares held by those specified persons/entities in the private subscription (and their related parties) are not considered in the voting.

  [1] GAFi Circular No. 30/2019 with the regulations on capital increases in companies, available through this link (in Arabic).