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Egypt's OT To Challenge Mobinil Decision In Court
Published Jan 4, 2010
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Orascom and France Telecom are Mobinil's main shareholders, but neither has a majority stake. The two have been locked in an ownership dispute since 2007.
An appeals committee on Saturday rejected a request by Orascom that the regulator cancel its earlier approval of the France Telecom purchase.
Orascom "intends to file a case before the Administrative Court (Investment Division) to challenge the decision and request its annulment and seek an injunctive relief to stay the decision," the company said in a statement.
France Telecom (FT) subsidiary Orange Participations offered to buy all shares of Mobinil, Egypt's biggest mobile firm by subscribers, outstanding for LE 245 ($44.63) each beginning on Dec. 15. The offer ends on Jan. 14.
Orascom said it would file the case before Jan. 14 and that it "shall continue amicable negotiations with FT".
Both France Telecom and Orascom own Mobinil shares directly and indirectly through a holding company owned jointly by the two companies.
Orascom argued that France Telecom should have offered LE 273 for the shares to be bought through the stock exchange, equivalent to a price set by an Egyptian court in April for Mobinil shares held by Orascom through the holding company.
France Telecom now owns 36.3 percent of Mobinil and if all shareholders were to agree to sell their shares, it would cost France Telecom $2.9 billion, said Marise Ananian, a telecoms analyst with brokerage EFG-Hermes.
"This is assuming that they will pay LE 273 for some shares and LE 245 for the rest," she added.
If market heavyweight Orascom were to sell its shares, it could net around $1.5 billion, Ananian said.
Orascom went to its shareholders this month to seek an extra $800 million in capital to cover a cash shortfall pending the resolution of a separate dispute with the Algerian authorities over taxes at its Algerian unit Djezzy.
A sale of its Mobinil shares, however, would remove Orascom from its home Egyptian market.
Orascom runs mobile phone operations from North Africa to North Korea and earlier this month won approval in Canada to go ahead with a startup wireless operation called Globalive, in which it owns an indirect stake.
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VMD - [Virtual Marketing Department]
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