UAE operators Etisalat, du raise foreign ownership to 49%

UAE telecom operators Etisalat and du have raised the ownership limit of foreign nationals to 49 per cent.

“Non-UAE nationals (whether individual or legal entities) are entitled to own shares in the company up to 49 per cent of the company’s capital. Local and international telecommunication companies are not permitted to own shares in the company,” du said, in a bourse filing to Dubai Financial Market.

“With the exception of the shareholders of EITC holding more than 5 per cent in the company’s capital as of the date of this resolution, no individual or legal entities is allowed to own (directly or indirectly) more than 5 per cent in the company’s capital,” it added.

In a similar move, Abu Dhabi-headquartered Etisalat has also increased the foreign ownership cap from 20 per cent to 49 per cent.

“Etisalat Group’s board of directors discussed increasing the ownership limit of the non-UAE nationals in the company and resolved to increase such limit from 20 per cent to 49 per cent of its capital,” Etisalat said, in a filing to Abu Dhabi Securities Exchange.

“Raising the afore-said limit requires changes in the Decree by Federal Law No. 3 of 2015 amending some provisions of Federal Law No. 1 of 1991 concerning Emirates Telecommunications Corporation, as well as the Company’s Articles of Association. This requires the approval of Etisalat Group’s General Assembly and the competent authorities.

The boards of both companies discussed the proposals at their respective meets on January 20.

A higher cap on foreign ownership will allow index providers such as MSCI and FTSE Russell to consider an increase of the stock’s weight in emerging-market equities benchmarks, triggering passive inflows.

Etisalat, the UAE’s biggest phone operator, first opened up to foreign ownership in 2015 with a 20 per cent limit. Foreigners currently own 4.8 per cent of Etisalat’s shares and only 0.48 per cent of Du, according to information on Dubai and Abu Dhabi stock exchange websites.

With inputs from Bloomberg