Draft law allows foreigners to own shares in Etisalat

According to the operator, data gift packages can be sent from prepaid to prepaid, post-paid to prepaid and prepaid to post-paid customers. (File)

Published Thursday, June 07, 2012

By Staff

A new draft law will be completed soon to allow Emirates Telecommunications Corporation (Etisalat) to go public, paving the way for foreigners to own shares in the company, reported Emarat Al Youm.

According to the newspaper, the bill opens the door to new liquidity to the stock and to the market, according to experts.

The Board of Directors of the Emirates Investment Authority issued a decision to accelerate the completion of the draft of the amendment of the Law Etisalat that would transfer the Emirates Telecommunications Corporation (Etisalat) from an institution to a public shareholding company.

A senior source in Etisalat, and experts representing shareholders in the corporation, said that the decision paves the way for public and private shareholding companies owned by Emiratis or GCC citizens to own shares in Etisalat if the law is adopted.

They asserted shareholding is yet limited to Emirati individuals but in the case of the application of the law, it will open up the possibility of allowing foreign investors to own shares in Etisalat.

They confirmed to Emarat al Youm that the conversion of Etisalat to a public shareholding company opens the door to reduce the royalty paid to the government which is up to 50% of the profits of Etisalat, but at the same time they ruled out that it will be canceled completely.

They said "if the law is passed it would increase the value of the shares of Etisalat on the grounds that it allows access to new liquidity.

The Board of Directors of the Emirates Investment Authority held a meeting on Tuesday under the chairmanship of Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, Chairman of the EIA.

It discussed the development of the telecommunications sector in the UAE and ways to raise the efficiency of Etisalat) and Emirates Integrated Telecommunications (Du).

The Board of Directors also requested the Administration to speed up the completion of the draft of amendment the Law of the Emirates Telecommunications Corporation (Etisalat), which would transfer it from one institution to a public company.

Where they confirmed it would have several positive effects in the company, and in the local market in the short and long term.

It is worth mentioning that the current number of shares of the Emirates Telecommunications Corporation (Etisalat) is about 7.9 million shares, and the Emirati individuals own most of shares.

He pointed out transferring Etisalat to a public company means to pursue policies based on creating a new framework for governance and transparency based on the whole to a new way to manage the Emirates Telecommunications Corporation (Etisalat).

He added it will protect the interests and financial rights of the shareholders, and achieve maximum efficiency in the management of financial resources of the institution, and raise the level of performance in general.

He explained "the Emirates Telecommunications Corporation (Etisalat) was established according to a special decree by the late, Sheikh Zayed bin Sultan Al Nahyan.

He added but it is a public shareholding company and managed by a special law that does not fall under the umbrella of the Companies Act.

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