Cancellation will cost Leabanese operators millions

The two Lebanese mobile operators that were stripped of their BOT contracts by the government this month are set to lose hundreds of millions of dollars as a result.

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By  Alex Marklew Published  June 29, 2001

The Lebanese Higher Council For Privatisation's decision to strip Cellis of its operating licence looks likely to cost the company US $100 million right away.

The International Finance Corporation, the finance arm of the World Bankm has written to the company requesting repayment of a six-year, $100 million loan with immediate effect.

Under the conditions of the loan, the full amount must be repaid if Cellis' operating contract is terminated for any reason.

"France Telecom, which owns 69 percent of Cellis, will probably pay the rest of the loan soon because the contract with the government was cancelled three years before its original expiry," said an unnamed Cellis executive.

A spokesman for France Telecom said that half of the loan had already been paid back and that, as Cellis made a profit of $56 million last year, covering the rest of the debt would not be too difficult.

"There is no problem in paying the money. But France Telecom is not happy," said one anonymous source in Lebanon's Daily Star newspaper.

On top of this, the government is also expected to fine Cellis and LibanCell $600 million between them for allegedly exceeding the number of cellular subscriptions allowed under the licences.

However, the government is also calling in international auditors to decide how much compensation should be paid to the operators for their loss.

"If Cellis is not satisfied by the compensation from the government, the company will seek arbitration to get all its money," said the Daily Star's source.

France Telecom is reportedly furious at the Lebanese government for the cancellation

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