Egypt-based telecoms group Orascom Telecom has been ordered to sell its shares in cellco Egyptian Company for Mobile Services (MobiNil) to France Telecom (FT) by the International Court of Arbitration. The ruling comes as a result of a case that was brought in front of the court in August 2007. According to TeleGeography’s GlobalComms database, Orascom commenced arbitration proceedings against FT in connection with a dispute arising out of a shareholders’ agreement dated 29 August 2001. The agreement in question concerns the option of either shareholder buying out the other’s shares in the case of a ‘serious disagreement’, although no details of the dispute were made public. Orascom said that in the wake of the ruling it must sell its holding to the French company at EGP273.26 (USD48.99) per share, and it expects to raise approximately USD1.7 billion upon completion of the transaction. FT noted that the court order only refers to a holding company, called MobiNil Telecommunications, that has a 51% percent stake in the cellco MobiNil. It is understood that the sale of Orascom’s 28.75% stake in the holding company would automatically trigger a FT tender offer for all regular shares of MobiNil. The sale of shares in the holding company should be completed by 10 April.
Orascom has said that it plans to use any funds raised by the enforced sale for expansion. The group currently has operations in Pakistan, Algeria, Tunisia, Bangladesh, Zimbabwe and North Korea and it is believed it will target Africa as a region for possible acquisitions.
The sale is not expected to affect MobiNil, with the cellco’s CEO Hassan Kabbani noting, ‘This is a change in partnership structure but it will have no effect on MobiNil operations’.