France Telecom has agreed to pay Orascom Telecom US$300m to bring an end to a bitter, two-and-a-half-year fight to control Mobinil, Egypt’s largest mobile phone operator.
According to the final version of the new agreement between the two companies,…
France Telecom has agreed to pay Orascom Telecom US$300m to bring an end to a bitter, two-and-a-half-year fight to control Mobinil, Egypt’s largest mobile phone operator.
According to the final version of the new agreement between the two companies, which are the largest shareholders in Mobinil, France Telecom will pay the money to Orascom to settle their dispute in both the Egyptian court system and internationally.
France Telecom attempted to buy out Orascom and the other minority shareholders in Mobinil three times last year after the International Court of Arbitration sought to settle a dispute between the two by ruling that France Telecom could buy Orascom’s 28.75% stake in the unlisted holding company that has a controlling shareholding in Mobinil.
However, Orascom argued that France Telecom had to extend its offer of E£273 a share for the 28.75% stake in the holding company to the minority shareholders who owned the remaining 49% of Mobinil.
The Egyptian courts eventually found in Orascom’s favour; on 10 April, the Administrative Court in Cairo blocked France Telecom’s third attempt to take over Mobinil forcing the French operator to negotiate a deal with Orascom’s executive chairman Naguib Sawiris.
Under the new agreement between the two big shareholders, which they submitted to the Egyptian Financial Services Authority on 14 April, France Telecom will keep its effective shareholding of 36.3% and Orascom will keep its effective stake of 34.7%.
France Telecom and Orascom will have equal management control over the company, according to the new agreement.
The two also agree that Mobinil would buy internet service provider LinkDotNet from Orascom Telecom for US$130m.
