Cairo: France Telecom and Orascom Telecom Holding agreed to end a two-and-half-year-old legal dispute about their ownership of the Egyptian Company for Mobile Services, or Mobinil.
The two companies, which jointly control Mobinil, will implement a new shareholder agreement without changing the company's ownership structure, they said in a statement. "We have agreed to end the legal dispute," Hani Serie Al Deen, Orascom's lawyer, said in Cairo after a meeting between the two companies yesterday.
The accord puts into question France Telecom's plan to buy out minority shareholders in Mobinil, Eqypt's largest mobile- phone operator by subscribers. The move would have brought France Telecom Chief Executive Officer Stephane Richard closer to his ambition of doubling emerging markets sales in the next five years. Richard said this month that France Telecom may spend as much as 7 billion euros (Dh35 billion) on deals in Africa and the Middle East in that period.
Relief
"The end of this two-and-half-year-long dispute is a relief to Orascom Telecom's shareholders with their company retaining its ownership in Mobinil," Cairo-based investment bank CI Capital said in a research report yesterday. "We tend to think that Orascom Telecom has managed to keep its ownership in the Egyptian Co for Mobile Services intact and strengthen its stronghold."
France Telecom owns about 71 per cent of Mobinil Telecom, which controls Egyptian Co for Mobile Services with a 51 per cent stake. Orascom owns 29 per cent in Mobinil Telecom and 20 per cent in Egyptian Co.
France Telecom was told by regulators it had to bid for the outstanding shares of Egyptian Co to implement an arbitration ruling to buy Orascom's stake in Mobinil Telecom.
France Telecom had said it would pay 245 Egyptian pounds (Dh162) apiece for about 49 million shares owned by minority investors, a price Orascom rejected as too low. On April 10, an Egyptian court ruled that France Telecom's $2.2 billion (Dh8 billion) bid for minority shares in Mobinil was too low, because it was less valuable than an offer made to Orascom in an arbitration accord last year.
"We needed a clear and sufficient agreement and this is very good," said Khalid Bichara, chief executive officer of Orascom, at a media conference in Cairo after his meeting with Jean Yves Larrouturou, France Telecom's deputy chief executive officer.
