EGX allows OTC trading of subscription rights in unlisted companies

The EGX is now allowing for subscription rights in capital increases for unlisted companies to be traded over-the-counter, bourse chairman Mohamed Farid said, according to Al Mal. This would allow unlisted companies to finance expansion without having to list on the market and expand their investor base. One very smart lawyer tells us the regulatory change would allow for the right to subscribe to the capital increase of an unlisted company to be traded separately. He says the change would make it possible to add new investors to recently incorporated companies that have not yet issued two sets of financial statements by allowing the founders to sell their right to subscribe to the capital increase to new investors.