Ownership dispute over Egyptian carrier escalates

The struggle for control of Egyptian mobile carrier Mobinil became more heated over the weekend after Orascom failed to transfer its holding in the company to France Telecom.

Orascom argues that it was unable to transfer the shares, as ordered by the International Court of Arbitration of the International Chamber of Commerce, because France Telecom filed to pay the agreed purchase price for the stake.

The Egyptian carrier is also trying to force France Telecom to extend an offer to buy out the minority shareholders in Mobinil’s parent company ECMS, although France Telecom’s attempt to carry out this move was scuppered by the Egyptian Capital Market Authority (CMA) last week, which sided with Orascom and said the offer was not good enough.

Orascom said Monday it has extended it offer until Wednesday, April 15.

On the other side, France Telecom has hit out at Orascom, claiming that the Egyptian firm is engaging in a media campaign to swing opinion over the dispute. The French company also says that Orascom is risking a $50,000 a day penalty since April 10 for failing to complete the share transfer.

“Once Orascom Telecom has complied with the arbitration award, France Telecom is looking to re-establish discussions with the Egyptian authorities in order to make a fair offer to minority and individual shareholders of ECMS,” France Telecom said.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

France Telecom holds 71.25 per cent of Mobinil, a holding company owning 51 per cent of ECMS, which is the mobile operator that offers services under the Mobinil brand. However, the 20 per cent interest that Orascom holds directly in ECMS, as well as the free float of ECMS, do not fall within the scope of the ruling, but is now the subject of the disputed buyout offer.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.