EGYPT Law and Practice Contributed by: Nadia Abdallah, Zahra Ashraf, Beshoy Mounir and Yasmine Attia, Matouk Bassiouny & Hennawy
Fairness opinions are legally required in certain cases, including the following, without limitation: • For a capital increase in listed companies, insur- ance companies and holding companies, an FMV report must be prepared by an IFA accredited by the FRA, to determine the FMV of the shares. • The FRA may require a listed company to submit an FMV as prepared by an IFA in the event that there is a price change in one direction amount- ing to more than 50% within a period of time not more than three months or more than 75% within a period of time not more than six months, where such movement is inconsistent with market or sector indicators relevant to the issuing company and/or its business results, and where no material information is available to justify such change.
• If a listed company wishes to sell any of its real estate or other fixed assets or shares it owns in unlisted companies, and their estimated value represents 10% or more of the equity rights of the listed company according to its latest financial statements, such company must provide an FMV report prepared by an IFA accredited by the FRA and issued to the EGX, to determine the FMV of the assets or shares subject to the sale. • For a capital increase in unlisted companies, the FMV can be determined by an IFA, as outlined above, or be based on a study conducted by the company for this purpose under its own responsi- bility. This study must be accompanied by an audi- tor’s report prepared in accordance with Egyptian auditing standards.
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