The dispute over Egypt's leading mobile player has been running for several years

The Egyptian Government has brokered a deal between France Telecom and Egyptian entrepreneur Naguib Sawiris’ operator Orascom Telecom that will see the two firms remain partners in leading Egyptian carrier EMCS, which operates under the brand Mobinil. Ownership of the operator has been the source of tensions and legal disputes between the two players for several years.

A statement from the carriers pledged that the agreement, signed on Wednesday, will “bring to an end all disputes in relation to their joint investment in Mobinil.”

The deal will usher in a revised shareholder agreement but there will be no change to the existing ownership structure or shareholder voting rights, the firms said.  The agreement will also see leading Egyptian ISP LinkdotNet absorbed into ECMS, widening the carrier’s offering to include broadband, a proposal that the firms said was welcomed by Egypt’s Minister for Communications and Information Technology.

Stephane Richard, CEO of France Telecom, promised to sustain investment in the country on the back of the deal: “Our two groups will now be able to continue working together in order to further contribute to the development of telecommunications services and information technology in Egypt,” he said. This market is very important for France Telecom and we will continue to invest and contribute our know-how in the years to come. In addition, this will also reinforce our commitment to maintain a strong R&D and Orange Business Services presence in Egypt.”

Regulatory approval allows France Telecom to consolidate its position in Egypt

Egypt’s financial regulator has granted approval for the purchase of the stake it doesn’t already own in the country’s leading carrier Mobinil by France Telecom’s Orange. For some time the deal has been the subject of a spat between France Telecom and Mobinil’s other principal shareholder, Egyptian player Orascom Telecom.

The dispute began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom. However, the court ruled in France Telecom’s favour and required Orascom to transfer its stake in Mobinil’s holding company to the French incumbent.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under was ruled in July to be owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

Since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

Now, with an offer of 245 Egyptian Pounds per share, Orange, the CMA has finally given its blessing to the deal.

At the end of September 2009, Mobinil had 23.4 million subscribers, according to figures from Informa Telecoms & Media’s WCIS.

Khaled Bichara will become CEO of Orascom

Egyptian carrier Orascom Telecom announced a shake up of its leadership team, promoting chief operating officer Khaled Bichara to the position of group chief executive officer.

Bichara will report directly to Naguib Sawiris, who will now take the position of executive chairman and will continue to direct the group’s growth and expansion strategy.

“The telecommunication business is continuing to grow and evolve at a rapid pace, and we’re reshaping OTH to be a leader in this transformation. I will also remain involved in the businesses with more focus on steering the Group’s strategic growth while guiding and supporting the activities of the senior management team. I believe that the telecom market will see massive consolidation during the coming years, and with the new structure I will be able to devote more time and effort in this direction,” Sawiris said.

Orascom said that net income for the third quarter 2009 reached $365m, growing 6 per cent over the same period in the previous year. For the nine months to the end of September, Orascom reported revenues of $3.8bn, down 1.9 per cent over 2008.

The company’s total subscribers hit 89 million at the end of September, an increase of 12.1 per cent over September 2008.

Meanwhile, Sawiris is still upset at Canada’s objections to Orascom opening up shop in North America. Orascom has an investment in AWS spectrum licensee Wind Mobile Canada, previously known as Globalive Wireless, which the Canadian regulator has said is not eligible to operate in Canada.

The CRTC objects to launch of Wind, saying that it is in breach of foreign ownership rules, a move which may put the kybosh on Wind’s proposed launch of early December.

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Orascom drops proceedings over Mobinil

Egyptian carrier Orascom Telecom said Sunday that it has dropped court proceedings against France Telecom over the long running spat involving Egyptian mobile operator Mobinil.

The dispute focuses on the ownership of Mobinil, with the companies accusing each other of failing to comply with the terms of a court ruling requiring Orascom to transfer its shares in Mobinil to France Telecom.

The spat began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom. However, the court ruled in France Telecom’s favour and required Orascom to transfer its stake in Mobinil’s holding company to France Telecom.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under the latest ruling is now owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

Since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

Orascom said Sunday that the court proceedings are no longer necessary, in light of recent public pronouncements by France Telecom, “Which make it clear that, regardless of the fact that the 30 days period (as extended) under the sale contract arising out of the Award has lapsed, FT has no intention of extending a public tender offer on the same terms as those contained in the Award and is therefore not in a position to conclude the sale as mandated by the ruling of the Capital Market Authority issued on 7 April 2009 in any event.”

The Egyptian carrier said it would discontinue proceedings before the Economic Court “to avoid unnecessary costs and in an amicable gesture to focus attention on the business of running Mobinil,” adding that it hopes further litigation can be avoided.

France Telecom takes bigger stake in Mobinil

European carrier France Telecom said Sunday that it has secured commitments from minority shareholders to acquire yet more of leading Egyptian mobile operator Mobinil.

Mobinil is at the centre of an ongoing dispute between Egyptian carrier Orascom Telecom and France Telecom, that began in 2007, when Orascom initiated a lawsuit seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However, the court ruled in France Telecom’s favour and required Orascom to transfer some of its stake in Mobinil to France Telecom.

Mobinil is about 51 per cent owned by ECMS, a holding company that was jointly owned by Orascom and France Telecom, but under the latest ruling is now owned exclusively by France Telecom. Orascom also owns 20 per cent of Mobinil directly.

But since the court order, France Telecom has been trying to pitch an acceptable offer to buy minority shareholders, which hold the other 49 per cent out of ECMS. However, the French firm has seen its efforts rebuffed by the Egyptian Capital Market Authority (CMA) for being too low.

So on Sunday, France Telecom said that its mobile subsidiary, Orange, has received expressions of interest from a number of minority shareholders in ECMS, and has secured a commitment to buy shares in ECMS at a price of EGP230 (€29) per share.

Orange said it has secured commitments for more than 3 per cent of the issued share capital of ECMS, representing more than 6 per cent of the free float of ECMS.

Orascom rejects Mobinil buyout again

Egyptian carrier Orascom Telecom has rejected yet again an offer from France Telecom to buy out minority shareholders in leading Egyptian mobile operator Mobinil.

The Egyptian regulator recently ruled that France Telecom should make an offer to buy all shares in Mobinil as part of its purchase of Orascom’s stake in ECMS, a holding company that owns 51 per cent of Mobinil.

The deal had been sweetened by France Telecom after its last attempt to carry out this move was scuppered by the Egyptian Capital Market Authority (CMA), which sided with Orascom and said the initial offer was not good enough. No details were given on how France Telecom increased it’s offer, but Orascom released a statement rejecting the deal.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However, the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

Ownership dispute over Mobinil escalates

The struggle for control of Egyptian mobile carrier Mobinil became more heated over the weekend after Orascom failed to transfer its holding in the company to France Telecom.

Orascom argues that it was unable to transfer the shares, as ordered by the International Court of Arbitration of the International Chamber of Commerce, because France Telecom filed to pay the agreed purchase price for the stake.

The Egyptian carrier is also trying to force France Telecom to extend an offer to buy out the minority shareholders in Mobinil’s parent company ECMS, although France Telecom’s attempt to carry out this move was scuppered by the Egyptian Capital Market Authority (CMA) last week, which sided with Orascom and said the offer was not good enough.

Orascom said Monday it has extended it offer until Wednesday, April 15.

On the other side, France Telecom has hit out at Orascom, claiming that the Egyptian firm is engaging in a media campaign to swing opinion over the dispute. The French company also says that Orascom is risking a $50,000 a day penalty since April 10 for failing to complete the share transfer.

“Once Orascom Telecom has complied with the arbitration award, France Telecom is looking to re-establish discussions with the Egyptian authorities in order to make a fair offer to minority and individual shareholders of ECMS,” France Telecom said.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

France Telecom holds 71.25 per cent of Mobinil, a holding company owning 51 per cent of ECMS, which is the mobile operator that offers services under the Mobinil brand. However, the 20 per cent interest that Orascom holds directly in ECMS, as well as the free float of ECMS, do not fall within the scope of the ruling, but is now the subject of the disputed buyout offer.

France Telecom takes over Mobinil

France Telecom has taken full control of Egyptian mobile carrier Mobinil, after settling a lengthy legal dispute with local operator Orascom Telecom and shelling out Eur530m for Orascom’s holding in Mobinil.

Back in 2007, Orascom initiated a lawsuit against France Telecom seeking to force the French carrier to transfer its Mobinil shares over to Orascom.

However the court ruled in France Telecom’s favour and required Orascom to transfer its entire stake in Mobinil to France Telecom.

France Telecom holds 71.25 per cent of Mobinil, a holding company owning 51 per cent of ECMS, which is the mobile operator that offers services under the Mobinil brand. However, the 20 per cent interest that Orascom holds directly in ECMS, as well as the free float of ECMS, do not fall within the scope of the ruling.

But as a result of the ruling, France Telecom will be able to consolidate the entire financial results of ECMS, representing additional annual revenues of over Eur360m.

As of the end of 2008, Mobinil had 20.1 million subscribers and around 43 per cent market share, making it the market leader ahead of Vodafone Egypt and Etisalat.