FRA noted that it came to its decision after studying many international practices, after which they concluded that SPACs is a preferred method for many experienced founders and major shareholders
Egypt’s Financial Regulatory Authority (FRA) has agreed to allow the establishment and licensing of special-purpose acquisition companies (SPAC), within the activity of venture capital companies.
FRA noted that it came to its decision after studying many international practices, after which they concluded that SPACs is a preferred method for many experienced founders and major shareholders.
SPACs will be a new type of company that the Egyptian Exchange (EGX) is eager to receive, with EGX chairman Mohamed Farid previously proposing the introduction of rules for listing special purpose acquisition companies on the stock exchange.
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A SPAC is also known as a blank-check company and is formed to raise money through an IPO with the aim to buy an existing company and take it public.
FRA chairman Mohamed Omran noted that the authority’s decision reflects the interest in creating financing solutions that would facilitate the access of investors, especially small and medium-sized companies, to empower the private sector and support its expansion.
This will provide emerging companies, particularly in the fields of digital technologies, with the opportunity to connect with investors, and offers investors the ability to establish a SPAC for the purpose of listing on the EGX and acquire or merge companies through them.
