PROPOSED VOLUNTARY DELISTING AND SHARE BUYBACK OFFER

Cairo (29/01/2025) - Ezz Steel Company S.A.E., (EGX: ESRS, LSE AEZD), an Egyptian joint stock company (the "Company"), hereby makes the following announcements:

·     At its extraordinary general assembly meeting (EGM) of the shareholders held on 28 January 2025  (the "EGM") the shareholders have approved, inter alia, the voluntary delisting of the Company's shares (the "Voluntary Share Delisting") from the Egyptian Stock Exchange (the "EGX") and the proposed buyback of up to 171,905,362 shares (which includes 9,514,653 shares represented by 3,171,551 Global Depositary Receipts (the "GDRs") (each GDR represents three ordinary shares in the capital of the Company)) held by public shareholders (the "Share Buyback Offer").

·    The resolutions put to shareholders were duly passed at the meeting. The resolutions can be found in the Notice of EGM announced on the LSE on 28 January 2025 (https://www.londonstockexchange.com/news-article/AEZD/resolutions-for-extraordinary-general-meeting/16873717).

·    As previously announced, subject to various conditions described in this announcement, the Board of Directors has also conditionally approved the voluntary delisting of its GDRs (the "Voluntary GDR Delisting") from listing on the Official List and trading on the London Stock Exchange (the "LSE").  That decision is not subject to approval by the EGM.

SHARE BUYBACK OFFER

The Company offers to purchase up to of up to 171,905,362 shares (which will include the 9,514,653 shares represented by 3,171,551 GDRs) (the "Buyback Shares") in the Share Buyback Offer.

The Share Buyback Offer is expected to commence on or around 2 March 2025 (the "Launch Date") and is expected to expire at 1.30p.m., Cairo time, on or around 6 March 2025 (the "Expiration Date"). The Launch Date and the Expiration Date may be earlier or later than (as the case may be) as stated in this announcement.

Buyback Shares must be validly offered for sale prior to the Expiration Date. Buyback Shares purchased by the Company pursuant to the Share Buyback Offer will be held in treasury until a proposed reduction of capital is approved by an EGM, which is expected to occur during the period between 3 months and 12 months after the Share Buyback in accordance with the EGX Listing & Delisting Rules.

Pursuant to the terms of the Share Buyback Offer, the Company will be required to make payment (after the deduction of any taxes, fees and expenses) to the relevant local Egyptian broker in respect of the accepted Buyback Shares in cash, without interest, within approximately two Egyptian business days of the Expiration Date.

The Share Buyback Offer will be subject to the terms and conditions included in the Delisting Application, which the Company has submitted to the FRA and published on the LSE on 18 December 2024 (https://www.londonstockexchange.com/news-article/AEZD/delisting-form-74-fra-approval-to-delist/16818406).

GDR holders may not sell their GDRs directly in the Share Buyback Offer. However, GDR holders may seek to participate in the Share Buyback Offer by requesting withdrawal of the shares underlying their GDRs from the Depositary (as defined in Appendix 1 (Instructions to GDR holders)) and, to the extent that it is possible to transfer the withdrawn shares to the GDR holders in sufficient time before the Expiration Date, such former GDR holders may then offer for sale their shares in the Share Buyback Offer. For further details, GDR holders should refer to Appendix 1 (Instructions to GDR holders) below. GDR holders wishing to participate in the Share Buyback Offer should take the actions described in Appendix 1 as soon as possible prior to the launch of the Share Buyback Offer and, in any case, no later than 10 days before the Expiration Date  otherwise, there can be no assurance that it will be possible for the Depositary to cancel GDRs and procure transfer of shares in time to enable the shares to be tendered by former GDR holders in the Share Buyback Offer, or that all the shares received upon cancellation of the GDRs will be available in time to be tendered in the Share Buyback Offer, or that such shares will be accepted by the Company in the Share Buyback Offer. 

Although the Board of Directors believes that the return of capital by means of the Share Buyback Offer is in the best interests of the Company and the shareholders and has approved the Share Buyback Offer, neither the Board of Directors nor the Company is making a recommendation to shareholders in relation to participation in the Share Buyback Offer itself. Whether or not shareholders decide to offer all or any of their Shares (as defined below) (including Shares represented by GDRs ("GDR Shares")) for sale will depend, among other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders (and GDR holders) should make their own decision in respect of participation in the Share Buyback Offer and are recommended to consult their investment and tax advisors.

VOLUNTARY GDR DELISTING

The Board of Directors has decided to proceed with the proposed Voluntary GDR Delisting from the London Stock Exchange, considering it to be in the best interests of the Company and its shareholders. The trading volume of the GDRs on the LSE has been consistently low, offering limited opportunities for investors to trade in meaningful quantities or with regular frequency. Additionally, maintaining the GDR listing imposes significant regulatory and administrative burdens on the Company, alongside substantial associated costs. After careful evaluation, the Board believes that delisting is a more cost-effective and beneficial course of action for shareholders.

Following the delisting, any issued ordinary shares of the Company not tendered in the Share Buyback Offer, as well as any GDRs not cancelled, will remain outstanding but will no longer be listed on any stock exchange. The Company remains committed to ensuring transparency and providing shareholders with relevant updates throughout this process. Further details regarding timelines and procedural aspects of the Voluntary GDR Delisting will be communicated in due course.

The proposed Voluntary GDR Delisting is subject to (1) the previously announced amendment to the Deposit Agreement (as defined below) and the Terms and Conditions of the GDRs becoming effective on March 10, 2025; and (2) after the amendments to the Deposit Agreement and Terms and Conditions of the GDRs have taken effect, notice of the Voluntary GDR Delisting being given to the FCA and LSE and passage of a subsequent 20 business days' notice period. Consequently, the proposed Voluntary GDR Delisting is currently expected to occur on or after 9 April 2025. The precise date of the proposed Voluntary GDR Delisting will be announced in due course.

AMENDMENT OF THE DEPOSIT AGREEMENT

As previously announced, in connection with the Share Buyback Offer and the proposed Voluntary GDR Delisting, on 7 December 2024, the Company executed an amendment to the Deposit Agreement dated 26 December 2005, as amended and restated from time to time, pursuant to which the GDRs are issued (the "Deposit Agreement"), entered into in connection with the Company's GDR program, and the Terms and Conditions of the GDRs, to remove its undertaking to use reasonable efforts to maintain a listing of the GDRs on the Official List and admission to trading on the London Stock Exchange. Under the terms of the Deposit Agreement and the Terms and Conditions of the GDRs, the amendment must take effect following a period of three months' notice to GDR holders.  The amendment to the Deposit Agreement and the Terms and Conditions of the GDRs does not require the approval of the GDR holders.

The Supplemental Agreement amending the Deposit Agreement and the Terms and Conditions of the GDRs was executed by the Company and the Depositary on 7 December 2024, therefore the amendments will take effect on 10 March 2025.

CERTAIN CONSEQUENCES OF THE TRANSACTIONS

As a result of completion of the Share Buyback Offer, the trading markets for each of the Company's shares and the GDRs will likely be adversely affected and less liquid and market prices may fluctuate significantly depending on the volume of trading in each of the shares and the GDRs prior to their delisting. In addition, while it cannot be predicted with certainty, a security with a smaller "public float" may command a lower price than would a comparable security with a greater public float, the decreased liquidity will likely also make it more difficult for holders of shares or GDRs that do not participate in the Share Buyback Offer to sell their securities in the market, if at all, before the Voluntary GDR Delisting and the Voluntary Share Delisting occur.

In addition, following completion of the Share Buyback Offer, the Company intends to effect the Voluntary GDR Delisting and the Voluntary Share Delisting.  The Company at present does not intend to apply for the listing of either the Shares or GDRs on any other securities exchange. Once the delistings occur, the trading markets for the Shares and GDRs will be further adversely affected. It is possible that either or both the shares or the GDRs would continue to trade in the "over-the-counter market". However, the extent of such market, if any, for either the shares or the GDRs would depend upon such factors as the number of security holders and the aggregate market value of such securities remaining at such time, the interest in maintaining a market in the shares or GDRs on the part of securities firms as well as other factors. In addition, the extent of any such market will be adversely affected by the level of information about the Issuer available to investors because following the delistings the Issuer will no longer be subject to the reporting and disclosure requirements applicable to EGX and Official List listed entities and the Issuer does not necessarily intend to voluntarily comply with such requirements. While it cannot be predicted with certainty, the delistings are likely to have a further adverse effect on the market price for and marketability of the Shares and GDRs.

FURTHER ANNOUNCEMENTS

Further announcements regarding the Share Buyback Offer, the Voluntary GDR Delisting and the Voluntary Share Delisting are expected be released by the Company in due course.

FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements. Forward-looking statements are statements that are not historical facts and include statements regarding the state of the steel industry, the Company's ability to compete, the trading of the shares and GDRs, the expected timing of completion and the related potential benefits of the Share Buyback Offer and the voluntary delisting. Forward-looking statements involve inherent risks, uncertainties and assumptions, including, without limitation, the possibility that the Share Buyback Offer and voluntary delisting may not materialise as expected, or at all. If such risks or uncertainties materialise or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions. The forward-looking statements contained in this announcement are made as of the date hereof, and the Company expressly disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this announcement.

IMPORTANT INFORMATION

This announcement includes inside information as defined under Egypt Capital Market Law No. 95 of 1992 and in Article 7 of the UK Market Abuse Regulation No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 and is being released by the Investors Relations of the Company.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. This announcement is not a recommendation to buy or sell the Company's shares or GDRs and is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase, exchange or subscribe for any securities in any jurisdiction.

The Share Buyback Offer will be made only pursuant to a Share Buyback Application in accordance with Listing and Delisting Rules of the EGX. The Share Buyback Application will be published after the Share Buyback Offer has been approved in accordance with the Listing and Delisting Rules of the EGX.

APPENDIX 1

INSTRUCTIONS TO GDR HOLDERS

The Share Buyback Offer is expected to commence on or around 2 March 2025 (the "Launch Date") and is expected to expire at 1.30 p.m., Cairo time, on or around 6 March 2025 (the "Expiration Date").

GDR holders may not sell their GDRs directly in the Share Buyback Offer. However, GDR holders may seek to participate in the Share Buyback Offer by requesting withdrawal of the Shares underlying their GDRs from The Bank of New York Mellon (the "Depositary") and, to the extent that it is possible to transfer the withdrawn shares to the GDR holders in sufficient time before the Expiration Date, such former GDR holders may then offer for sale their Shares in the Share Buyback Offer.

The relevant procedures applicable to GDR holders who seek to participate in the Share Buyback Offer, subject always to the Terms and Conditions of the GDRs, are set out below:

1.    Each GDR holder must instruct its broker or other securities intermediary through which it holds GDRs to:

a.    surrender the GDRs to the Depositary by book-entry transfer to the Depositary's Depository Trust Company account;

b.    pay the Depositary's Fees;

c.     sign and deliver the appropriate withdrawal certification for holders of Rule 144A GDRs and for holders of Regulation S GDRs, and

d.    provide the Depositary with details of the name of the person to whom Shares are to be transferred and, if relevant, the details of a custodial account in Egypt into which the withdrawn shares can be delivered (a "Local Custodian").

2.    Once the shares have been withdrawn in accordance with paragraph 1 above and delivered to the relevant person (which may be a Local Custodian, GDR holders having exchanged the Shares represented by their GDRs must instruct a broker which is authorised to act as a broker in Egypt (the "Local Broker") to offer for sale to the Company their Buyback Shares in the Share Buyback Offer in accordance with the Share Buyback Offer Application. The Local Custodian may, to the extent it has a brokerage arm, also act as the Local Broker.

3.    In addition to the Depositary's Fees, GDR holders will be required to pay brokerage fees (and custodian fees if holding the Buyback Shares through a custodian) as well as fees to third parties including the EGX, Clearstream Banking S.A. Euroclear, and Misr for Central Clearing, Depositary and Registry S.A.E.

4.    If, after withdrawing Shares from the GDR facility, GDR holders wish to transfer any Shares back  to the Depositary for deposit into the GDR facility, then additional fees will be payable to the Depositary in accordance with the Terms and Conditions of the GDRs.

GDR holders should allow time for the procedures above, including any "know your client" process required by brokers or custodians, to be completed prior to the Expiration Date. In addition, individual brokers may require that instructions to participate in the Share Buyback Offer are received well in advance of the Expiration Date. Failure to complete these procedures or provide the required instructions in a timely manner may prejudice GDR holders' ability to participate in the Share Buyback Offer. GDR holders wishing to apply to participate in the Share Buyback Offer may therefore wish to consider completing the steps in 1. above and the appointment of a Local Broker in advance of the Launch Date.

GDR holders are warned that there can be no assurance that, following a request to the Depositary for cancellation of GDRs and transfer of the underlying Shares, it will be possible for the Depositary to cancel such GDRs and procure transfer of the underlying Shares in time to enable the Shares to be tendered by former GDR holders in the Share Buyback Offer, or that all the Shares received upon cancellation of the GDRs will be available in time to be tendered in the Share Buyback Offer, or that such Shares will be accepted by the Company in the Share Buyback Offer.

Offers to the Company of Buyback Shares in accordance with the Share Buyback Offer Application may be withdrawn until the Expiration Date. A shareholder who has offered Buyback Shares will have its Buyback Shares blocked and therefore will not be able to transfer, dispose of, or otherwise deal in those Buyback Shares unless the shareholder validly withdraws its offer to the Company of Buyback Shares. For a withdrawal to be effective, your Local Broker must receive a written notice of withdrawal no later than 1:30 p.m., Cairo time, on the Expiration Date.

Any notice of withdrawal to the Company must specify the name of the relevant shareholder and the number of Buyback Shares to be withdrawn. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Company in its sole discretion, whose determination shall be final and binding.  

Questions and requests for assistance can be directed to the following:

Ezz Steel Company S.A.E.

Investor Relations

Ahmed Nabil

anabil@ezzsteel.com

+201001777703

ADDITIONAL INFORMATION REGARDING THE SHARES BUYBACK OFFER

If you do not wish to offer for sale to the Company your shares or the shares represented by your GDRs, you need not take any action. None of the Company, its directors, officers or employees, the advisors to the Company or the Depositary make any recommendation to any GDR holder or shareholder as to whether to offer or refrain from offering for sale the Shares represented by its GDRs or its shares, respectively. No person has been authorised to make any recommendation on behalf of the Company or the advisors to the Company as to whether GDR holders or shareholders should offer or refrain from offering for sale the shares represented by their GDRs or their shares, respectively, pursuant to the Share Buyback Offer or to make any representation or to give any information in connection with the Share Buyback Offer, other than as contained herein. If made or given, any such recommendation, representation or information must not be relied upon as having been authorised by the Company, its directors, officers or employees, or the advisors to the Company.

GDR holders and shareholders are urged to evaluate carefully all information in the announcement, the Instructions and the Share Buyback Offer Application and other related materials, consult their own investment and tax advisors and make their own decisions whether to offer or refrain from offering the shares represented by their GDRs or their shares, respectively. In particular, no advice is given with respect to the financial or tax position of the GDR holders or shareholders or any person on whose behalf the GDR holders or shareholders hold as custodian, nominee or trustee.

None of the delivery of the announcement, the Instructions or the Share Buyback Offer Application nor any purchase of shares or the shares represented by GDRs under the Share Buyback Offer shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof, or that the information herein is correct as of any time subsequent to the date hereof.

NOTICE TO OVERSEAS SHAREHOLDERS

The Share Buyback Offer does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. The Share Buyback Offer is not being made available to shareholders in any jurisdiction in which the making or acceptance of the Share Buyback Offer would not be in compliance with the laws of such jurisdiction. Any shareholders with a registered address in such jurisdiction will be excluded from the Share Buyback Offer. However, the Company may, in its sole discretion, take such action as it may deem necessary to comply with the laws of any such jurisdiction so that the Share Buyback Offer may be extended to, and acceptances may be received from, shareholders in any such jurisdiction.

The Share Buyback Offer is not being made available, directly or indirectly, in, into or from a jurisdiction where to do so would violate the laws of that jurisdiction, and the Share Buyback Offer is not capable of acceptance from or within that jurisdiction (including, but not limited to, Australia, Canada, Japan and South Africa) (each a "Restricted Jurisdiction"). Accordingly, copies of the announcement, these Instructions, the Share Buyback Offer Application and any accompanying document are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws of that jurisdiction. Any persons receiving the announcement, these Instructions, the Share Buyback Offer Application and any accompanying document (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions as doing so may invalidate any purported acceptance of the Share Buyback Offer. The availability of the Share Buyback Offer to overseas shareholders may be affected by the laws of the relevant jurisdictions in which they are resident. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions.

NOTICE TO SHAREHOLDERS IN THE UNITED KINGDOM

The announcement is only being distributed to, and is only directed at, persons who are located or resident outside the United Kingdom, or, in the case of persons located or resident inside the United Kingdom, who are: (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a "relevant person"). The announcement and its contents should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. The Share Buyback Offer is only available to, and any invitation, offer or agreement to sell will be engaged in only with, relevant persons. Any person in the United Kingdom who is not a relevant person should not act or rely on the announcement, the Instructions or the Share Buyback Offer Application, or any of their contents.

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

The Share Buyback Offer is being made available in relation to the securities of a company organised under Egyptian law. The securities of the Company have not been registered under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act"), and are not listed or traded on any stock exchange in the United States, and the Company is not subject to the periodic reporting requirements of the Exchange Act and is not required to, and does not, file any reports thereunder with the SEC. The Share Buyback Offer is being made available in the United States pursuant to applicable U.S. tender offer rules and securities laws, including the applicable provisions of Section 14(e) of the Exchange Act and Regulation 14E under the Exchange Act, subject to the exemptions provided by Rule 14d-1(c) under the Exchange Act, [and otherwise in accordance with the requirements of Egyptian law]. Accordingly, the Share Buyback Offer is subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under United States domestic tender offer procedures and law.

Neither the United States Securities and Exchange Commission (the "SEC") nor any securities commission of any State of the United States or regulatory authority in the United States has approved or disapproved of the announcement, the Instructions or the Share Buyback Offer Application, expressed a view with respect to the fairness or merits of the Share Buyback Offer or determined whether the announcement, the Instructions or the Share Buyback Offer Application are accurate or complete. Any representation to the contrary is a criminal offence in the United States.