By Will Rasmussen
CAIRO, April 5 (Reuters) - Orascom Telecom, the largest Arab mobile operator by subscribers, said an arbitration court had ordered it to sell its shares in its Egyptian unit to France Telecom.
Orascom said the court had ordered it to sell its shares of Mobinil at a price equivalent to 273.26 Egyptian pounds ($49) per share, allowing it to raise about $1.7 billion. The sale price is an 83 percent premium on Mobinil's Sunday closing price of 149.50 pounds.
Orascom said it would use the proceeds of the potential sale to fund expansion, but that it could also seek other alternatives to a sale with France Telecom. The two companies went to court in 2007 over a dispute about their joint shareholding in Mobinil, Egypt's largest mobile firm by subscribers.
'We are bound by the decision, but this does not mean we can't sit with France Telecom to discuss other options,' Ibrahim Karam, Orascom's head of corporate strategy, told Reuters. 'We are not bound if we sit and agree on something.'
France Telecom said the court order would only refer to a holding company, called Mobinil Telecommunications, that has a 51 percent stake of Mobinil. It said the sale of shares in the holding company should be completed by April 10.
Karam said Orascom believed the sale of Orascom's 28.75 percent stake in the holding company would automatically trigger a France Telecom tender offer for all regular shares of Mobinil. France Telecom currently owns a 71.25 percent stake in the holding company.
Depending on the shareholder response to any France Telecom offer, the 29 percent of Mobinil that is floated on Egypt's bourse could be de-listed.
Alongside its stake in the Mobinil Telecommunications holding company, Orascom also owns a separate 20 percent stake directly in Mobinil.
SHAREHOLDER DISPUTE
Orascom and France Telecom had brought a dispute to the International Court of Arbitration at the International Chamber of Commerce over an agreement the companies signed in August 2001 as partners in Mobinil Telecommunications.
They have not given specifics of the disagreement.
Mobinil's chief executive, Hassan Kabbani, said the resolution of the dispute would not affect Mobinil's operations.
'This is a change in partnership structure but it will have no effect on Mobinil operations,' he told Reuters.
Kabbani had told Reuters last month that the dispute would be solved 'soon.'
Shares of Mobinil, which posted a record profit in the fourth quarter of last year, closed 1.02 percent higher.
Orascom Telecom has operations in Egypt, Algeria, Tunisia, Pakistan, Bangladesh, Zimbabwe and North Korea. It also operates in Burundi and the Central African Republic through Telecel Globe.
Orascom has said it could expand further into Africa and bought a Namibian mobile operator for $59 million in January.
Cairo-based Pharos Research said in March it was concerned about Orascom Telecom's 'highly leveraged' balance sheet.
'This deal would definitely help Orascom and give them scope to cut debt,' said Angus Blair, head of research at Cairo-based investment bank Beltone Financial.
Orascom posted a 76 percent decline in 2008 profit this month.
Orascom Telecom chairman, Egyptian billionaire Naguib Sawiris, could not be reached on his mobile phone.
($1=5.62 Egyptian pounds)
(Additional reporting by Cyril Altmeyerhenzien and James Mackenzie in Paris; editing by Martin Golan) Keywords: ORASCOM DISPUTE/ (william.rasmussen@reuters.com; +20 2 2578 3290/1; Reuters Messaging: william.rasmussen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
CAIRO, April 5 (Reuters) - Orascom Telecom, the largest Arab mobile operator by subscribers, said an arbitration court had ordered it to sell its shares in its Egyptian unit to France Telecom.
Orascom said the court had ordered it to sell its shares of Mobinil at a price equivalent to 273.26 Egyptian pounds ($49) per share, allowing it to raise about $1.7 billion. The sale price is an 83 percent premium on Mobinil's Sunday closing price of 149.50 pounds.
Orascom said it would use the proceeds of the potential sale to fund expansion, but that it could also seek other alternatives to a sale with France Telecom. The two companies went to court in 2007 over a dispute about their joint shareholding in Mobinil, Egypt's largest mobile firm by subscribers.
'We are bound by the decision, but this does not mean we can't sit with France Telecom to discuss other options,' Ibrahim Karam, Orascom's head of corporate strategy, told Reuters. 'We are not bound if we sit and agree on something.'
France Telecom said the court order would only refer to a holding company, called Mobinil Telecommunications, that has a 51 percent stake of Mobinil. It said the sale of shares in the holding company should be completed by April 10.
Karam said Orascom believed the sale of Orascom's 28.75 percent stake in the holding company would automatically trigger a France Telecom tender offer for all regular shares of Mobinil. France Telecom currently owns a 71.25 percent stake in the holding company.
Depending on the shareholder response to any France Telecom offer, the 29 percent of Mobinil that is floated on Egypt's bourse could be de-listed.
Alongside its stake in the Mobinil Telecommunications holding company, Orascom also owns a separate 20 percent stake directly in Mobinil.
SHAREHOLDER DISPUTE
Orascom and France Telecom had brought a dispute to the International Court of Arbitration at the International Chamber of Commerce over an agreement the companies signed in August 2001 as partners in Mobinil Telecommunications.
They have not given specifics of the disagreement.
Mobinil's chief executive, Hassan Kabbani, said the resolution of the dispute would not affect Mobinil's operations.
'This is a change in partnership structure but it will have no effect on Mobinil operations,' he told Reuters.
Kabbani had told Reuters last month that the dispute would be solved 'soon.'
Shares of Mobinil, which posted a record profit in the fourth quarter of last year, closed 1.02 percent higher.
Orascom Telecom has operations in Egypt, Algeria, Tunisia, Pakistan, Bangladesh, Zimbabwe and North Korea. It also operates in Burundi and the Central African Republic through Telecel Globe.
Orascom has said it could expand further into Africa and bought a Namibian mobile operator for $59 million in January.
Cairo-based Pharos Research said in March it was concerned about Orascom Telecom's 'highly leveraged' balance sheet.
'This deal would definitely help Orascom and give them scope to cut debt,' said Angus Blair, head of research at Cairo-based investment bank Beltone Financial.
Orascom posted a 76 percent decline in 2008 profit this month.
Orascom Telecom chairman, Egyptian billionaire Naguib Sawiris, could not be reached on his mobile phone.
($1=5.62 Egyptian pounds)
(Additional reporting by Cyril Altmeyerhenzien and James Mackenzie in Paris; editing by Martin Golan) Keywords: ORASCOM DISPUTE/ (william.rasmussen@reuters.com; +20 2 2578 3290/1; Reuters Messaging: william.rasmussen.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.