Orascom Telecom, an Egyptian telco operating in 10 different countries, will almost certainly win the court case to retain its interest in Mobinil, its mobile phone business in its home country.
According to Egyptian bankers, the Administrative Court in…
Orascom Telecom, an Egyptian telco operating in 10 different countries, will almost certainly win the court case to retain its interest in Mobinil, its mobile phone business in its home country.
According to Egyptian bankers, the Administrative Court in Cairo will uphold an appeal from Orascom that it need not sell its 34.7% stake in Mobinil to France Telecom, its partner in the venture.
The Administrative Court will publish its judgment on Orascom’s appeal on Saturday March 27potentially ending a dispute over the ownership of Mobinil that has run for almost a year.
“We think France Telecom’s tender offer will be stopped,” says Nadine Ghobrial, telecoms analyst at EFG-Hermes, an Egyptian investment bank.
“France Telecom can either wait six months and make another offer at E£273 a share or it can work co-operatively with Orascom,” she says.
The giant French operator thought it had won control of Mobinil in December last year when Egypt’s capital markets regulator ruled that Orascom must accept a tender valuing the stake at E£245 a share.
However, Orascom appealed against the regulator’s decision later the same month. Saturday’s court ruling will exhaust both sides’ options to use the Egyptian legal system to pursue their claims on Mobinil.
The Administrative Court published a preliminary ruling in January striking down the capital markets regulator’s decision.
“The court was convinced by Orascom’s argument to cancel the regulator’s verdict. Orascom has won at least primarily,” says Sally Gerges, telecoms analyst at Beltone Financial, another Egyptian investment bank.
Under Egyptian law, France Telecom must wait six months before increasing its offer. As it made the offer of E£245 a share in December, it must now wait until late June.
The markets regulator could grant France Telecom the right to make a new offer whenever it wants.
Investors have no idea whether this will happen as the regulator, which only came into existence in July last year, has yet to use this power.
