Orascom Telecom ordered to offload shares
Court tells mobile phone operator to sell shares in its Egyptian unit to France Telecom.
Orascom Telecom, the largest Arab mobile operator by subscribers, said on Sunday 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.
Orascom said it would use the proceeds to fund expansion.
Orascom and France Telecom had brought a dispute to the International Court of Arbitration at the International Chamber of Commerce in 2007.
The two companies had not given specifics of their disagreement, which was over an agreement the companies signed in August 2001 as partners in Mobinil Telecommunications.
Mobinil's chief executive Hassan Kabbani said the resolution of the dispute would not impact 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 at 149.50 pounds.
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.
Orascom posted a 76 percent decline in 2008 profit this month. (Reuters)