Morocco Treasury Shares Guide IBA Corporate and M&A Law Committee 2014

Transcription

1 Morocco Treasury Shares Guide IBA Corporate and M&A Law Committee 2014 Contact José Ignacio García Muniozguren Jaafar Laidi Garrigues Maroc, Casablanca

2 Contents Page GENERAL OVERVIEW 2 REGULATORY FRAMEWORK 2 ACQUISITION OF TREASURY SHARES 3 UTILIZATION OF TREASURY SHARES 4 SALE OF TREASURY SHARES 4 TREASURY SHARES AND TAKEOVER LAW 5 Page 1

3 INTRODUCTION The following guide provides an overview of the Moroccan legal framework on the acquisition and sale of treasury shares of Moroccan stock corporations. This guide provides general information on treasury shares, on the legal requirements and restrictions of acquisitions and sales of such treasury shares under Moroccan law. The information in this guide cannot substitute professional legal advice. Therefore, anyone involved and considering a buy-back program of shares should not solely rely on this guide alone and should seek specialist advice. GENERAL OVERVIEW Is the buyback of shares permitted in your jurisdiction? The buyback of shares by non-listed companies is forbidden except if the company intends to buy its own shares in order to redeem them upon a capital reduction. The buyback of shares by listed companies is authorized but submitted to the restrictions described below. What are the characteristics (maximum holdings, voting rights and other rights) of treasury shares? Moroccan companies (listed or not) cannot hold treasury shares representing more than 10% of their total shares. Treasury shares lose their voting rights and have no dividend or subscription rights as long as they are held by the company. The shares acquired by the corporation must be fully paid-in and nominative. What are the main reasons to acquire treasury shares? The main reason for non-listed companies to acquire treasury shares is to redeem them upon a capital reduction. The main reasons for listed companies to acquire treasury shares are to (i) redeem them upon a capital reduction or (ii) allow the company to regulate the conditions governing the listing of its shares in the stock exchange market. REGULATORY FRAMEWORK The repurchase of treasury shares under Moroccan law is governed by the following laws: Dahir n , dated August 30, 1996, on sociétés anonymes. Decree n , dated February 24, 2003, on the forms and conditions of the buyback programs engaged by Moroccan stock corporations. Circular of the Conseil Déontologique des Valeurs Mobiliéres (CDVM) dated January 2012 as amended on April 8, 2013 and October 1, 2013 Réglement général de la bourse des valeurs de Casablanca approved by the Minister of Economy and Finances in virtue of arrétés dated July 7, 2008 and April 4, Page 2

4 Dahir dated April 21, 2004 on takeover bids. ACQUISITION OF TREASURY SHARES How can a company acquire treasury shares? Non-listed and listed companies can only acquire treasury shares in the scenarios discussed above. Are there any restrictions in acquiring treasury shares? (e.g. purpose-wise; accountingwise?) The analysis below focuses on the acquisition of treasury shares by listed companies. According to the CDVM circular, shares repurchase programs are intended to regulate the conditions governing the listing of the issuer shares in the stock exchange market in order to reduce the share s volatility and its excessive variations. Share repurchase programs can also be conducted as a preventive action aiming to strengthen the share s liquidity. The following restrictions apply: The number of shares repurchased by the company alone or together with shares held by third parties for the account of the company must not exceed 10% of the number of shares or of the number of shares within a given share category. If shares are repurchased in excess of the 10% cap, the company is obliged to re-sell such shares within one year from their repurchase. After one year said shares must be redeemed. The repurchase of shares is only allowed if the company s net assets do not fall below the amount of share capital plus non distributable reserves. Furthermore, the company must own reserves, other than legal reserve, at least equal to the total value of the shares it owns. Which authorization is needed? Non-listed companies need the authorization of the shareholders meeting as the purpose of the acquisition is to redeem the shares upon a capital reduction. Listed companies require the prior authorization of the shareholders meeting. The shareholders meeting resolution must determine (i) the maximum number of shares which may be repurchased (subject to the above mentioned 10%-cap); (ii) the period for which the authorization shall be valid (max. 18 months); and (iii) the maximum and minimum purchase price which may be paid by the company for the shares. What are the publicity requirements in the event of acquisition of treasury shares? Listed companies are required to prepare a public notice that needs to be cleared by CDVM. Said notice must include information about financial situation of the company, its perspectives and the consequences of the projected acquisition of treasury shares on the financing and development of the company. During the period of acquisition of treasury shares, the company must send monthly reports to CDVM (five days after the end of each month) including volume of shares purchased, weighted Page 3

5 average price of the purchased shares as well as aggregate value of the shares purchased since the beginning of the acquisition program. Reporting to the Casablanca stock exchange (the only one existing in Morocco) is also required. Put and call options do they count as acquisition of own shares? Put options Granting put options on shares by a company to its shareholders is deemed to have the same effect as an acquisition of its own shares by the company since the latter does not have control over the exercise of the option. Therefore, the restrictions discussed above would apply. Call options Granting call options by the shareholders to the company should be possible since the company have control over the exercise of the option. Exercise of the option by the company would be subject to the restrictions discussed above. UTILIZATION OF TREASURY SHARES Are there any statutory obligations to resell or redeem treasury shares? In general, there is no statutory obligation to re-sell or redeem treasury shares held by a listed company, provided that the company holds not more than the permitted ceiling of treasury shares (i.e. shares corresponding to a participation in the company s share capital of max. 10%). As long as the 10%-cap is respected, a listed corporation may choose to simply hold treasury shares. If the company wishes to dispose of treasury shares, the board of directors may decide to either redeem the shares or to re-sell the shares (see below). How are treasury shares redeemed? Under the shareholders resolution on the authorization of the repurchase of shares, the shareholders meeting may give advanced authorization to the board of directors to redeem treasury shares without seeking further approval by the shareholders meeting. The redemption of treasury shares results in the reduction of the company s capital stock. The treasury shares cease to exist upon the redemption becoming effective (i.e. only after registration of the capital reduction in the companies register). SALE OF TREASURY SHARES How can the company sell treasury shares? In listed companies treasury shares may only be sold via the stock exchange in the central market. Page 4

6 Are there any restrictions for selling treasury shares? There is an obligation for listed companies to report sale and redeem treasury shares to CDVM and to the Casablanca stock exchange. Which authorization is needed for selling treasury shares? The sale of treasury shares by listed companies needs to be previously authorized by the shareholders general meeting. Can treasury shares be sold other than via the stock exchange or by public tender offer? No. The sale of treasury shares by listed companies must take place in the central market of the stock exchange. What are the publicity requirements in the event of a sale of treasury shares? Like a repurchase program, the sale of treasury shares by listed companies must be reported to CDVM and to the Casablanca stock exchange as explained above. What legal restrictions are there in order to avoid market abuse? According to CDVM circular, repurchase programs of listed companies should not impact on the normal functioning of the market. Repurchase programs must also be carried by a brokerage firm and not by the company itself. The brokerage firm must be independent when executing the repurchase program. The company is not allowed to instruct the brokerage firm about the manner to conduct the repurchase program. TREASURY SHARES AND TAKEOVER LAW What are the general implications of treasury shares under the applicable takeover law regime? During a takeover bid, the target company and the persons acting in concert therewith cannot intervene directly or indirectly on the company s shares. However, when the takeover bid is entirely paid in cash, the target company could continue executing a repurchase program provided that the shareholders meeting expressly authorized it. Treasury Shares as defense measures? As described above, in listed companies shares repurchase programs are intended to regulate the conditions governing the listing of the issuer shares in the stock exchange market in order to reduce the share s volatility and its excessive variations. Share repurchase programs can also be conducted as a preventive action aiming to strengthen the share s liquidity. Therefore, treasury shares cannot be used as defense measures. Page 5