Egypt's Palm Hills approves reverse stock split on depositary shares

Palm Hills, Egypt’s second-largest listed property developer, said on Sunday it had changed the conversion ratio for its depositary receipts, effectively engineering a reverse stock split of the underlying shares.

The change, approved by the developer’s board of directors on Thursday, will mean one depositary receipt now represents 20 ordinary shares rather than five, Palm Hills said in a statement on the stock exchange website.

The change amounts to a reverse stock split on the underlying depositary shares, on the basis of one new depositary share for every four depositary shares, it said.

Palm Hills did not give a reason for the move.

Depositary receipts are financial instruments that make it easier for foreign investors to invest in a company or market. The prices are based on the underlying shares but are traded independently.

The change comes into effect beginning August 1, 2016.

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