Orascom drops proceedings over Mobinil

Egyptian carrier Orascom Telecom said Sunday that it has dropped court proceedings against France Telecom over the long running spat involving Egyptian mobile operator Mobinil.

The dispute focuses on the ownership of Mobinil, with the companies accusing each other of failing to comply with the terms of a court ruling requiring Orascom to transfer its shares in Mobinil to France Telecom.

The spat began in 2007, when Orascom initiated a lawsuit 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 stake in Mobinil’s holding company to France Telecom.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under the latest ruling is now owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

Since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

Orascom said Sunday that the court proceedings are no longer necessary, in light of recent public pronouncements by France Telecom, “Which make it clear that, regardless of the fact that the 30 days period (as extended) under the sale contract arising out of the Award has lapsed, FT has no intention of extending a public tender offer on the same terms as those contained in the Award and is therefore not in a position to conclude the sale as mandated by the ruling of the Capital Market Authority issued on 7 April 2009 in any event.”

The Egyptian carrier said it would discontinue proceedings before the Economic Court “to avoid unnecessary costs and in an amicable gesture to focus attention on the business of running Mobinil,” adding that it hopes further litigation can be avoided.