Orascom Telecom and France Telecom have signed an outline agreement bringing an end to their two-and-a-half-year dispute over the ownership of Mobinil, Egypt’s largest mobile phone operator.
The two operators have adopted a new shareholder agreement to…
Orascom Telecom and France Telecom have signed an outline agreement bringing an end to their two-and-a-half-year dispute over the ownership of Mobinil, Egypt’s largest mobile phone operator.
The two operators have adopted a new shareholder agreement to replace the contract – signed in 1998 – that led Orascom and France Telecom into a legal dispute that has passed through the International Court of Arbitration, the Egyptian capital markets regulator and the Egyptian courts.
The two companies will draft and sign a final version of the agreement within the next few weeks. Under the outline deal, which was welcomed by both the Egyptian Ministry of Communications & IT and the capital markets regulator, France Telecom and Orascom will have an equal level of management control and equal voting rights in Mobinil.
France Telecom and Orascom will keep their effective stakes in Mobinil, which is listed on the Egyptian Exchange under the name Egyptian Company for Mobile Services (ECMS), of respectively 36.3% and 34.7%. France Telecom’s stake comes through its 71.25% holding in a vehicle that owns 51% of ECMS. Orascom owns the remaining 28.75% stake in the vehicle and it holds an additional 20% direct stake in ECMS. The remaining 29% of ECMS is free float on the stock market.
Under the outline agreement, both the big shareholders agreed that Mobinil would acquire Orascom’s internet service provider business, LinkdotNet, for an undisclosed sum.
The LinkdotNet acquisition will enable Mobinil to sell bundled and standalone internet services to its customers.
In a statement, Stéphane Richard, the new chief executive officer of France Telecom, and Naguib Sawiris, executive chairman of Orascom Telecom, said that they had ended their disagreements and would work together to help Mobinil compete against Vodafone Egypt and Etisalat Misr – Egypt’s other two mobile phone operators.
Sawiris said, “We are happy with this agreement and I am personally grateful for Stéphane Richard’s positive commitment, which has facilitated this outcome. We are sure that now we will concentrate on maintaining Mobinil’s leading position.”
Richard said, “I am very satisifed that we have reached an agreement with an entrepreneur such as Naguib Sawiris. Our two groups will now be able to continue working together to further contribute to the development of telecommunications services and IT in Egypt. This market is very important for France Telecom.”
