Share dispute could harm Egyptian operator Mobinil
Chairman warns that ownership battle needs to be resolved “in a few months”
The battle between Orascom and France Telecom over the ownership of Egyptian mobile operator Mobinil could damage the business if it is not resolved in a matter of months, the chairman of Mobinil has warned.
France Telecom and Egyptian operator Orascom both own stakes in Mobinil, the largest mobile operator in the Middle East by subscriber numbers. France Telecom wants to increase it share of the business but Orascom is unwilling to let go of its share of the operator at the price France Telecom wants to pay.
Mobinil chairman Alex Shalaby yesterday stressed the need for a speedy resolution to the dispute. He told CommsMEA that a business review is due to take place in three months and if the ownership contest is not concluded by then it might limit the operator’s ability to compete.
“In a matter of a few months it could have an impact, assuming there is no resolution and the current situation was to prevail," he said.
"It has not affected us today, but it would be untruthful to tell you that if the process continues for another six months it will not have an impact, because we have budgets to work on and we have business plans and major decisions. Mobile broadband is a case in point where we would need the blessing of our shareholders.”
Shalaby likened the long-running disagreement between the shareholders to a custody battle, with France Telecom and Orascom the feuding parents and Mobinil cast as the child caught in the crossfire.
“The poor child doesn't know what to say; he loves momma, and he loves papa too," Shalaby said.
France Telecom wants to gain full control of Mobinil but Orascom has attempted to thwart France Telecom’s attempts.
Orascom owns 28.75% of Mobinil Telecom, as well as a 20% stake in the Egyptian Company for Mobile Services (ECMS), which operates under the brand Mobinil. France Telecom has a 71.25% stake in Mobinil Telecom, a company that has a 51% stake in ECMS.
Naguis Sawirib, Orascom’s chairman, has said that he would prefer not to sell his company’s stake in the Egyptian mobile operator at all.
Orascom raised the stakes in the long running dispute after France Telecom last month raised its offer to buy all of the remaining shares in ECMS. It has also appealed to an Egyptian court to have the transfer of control, which was imposed by an international arbitration panel in March, blocked because of France Telecom’s “failure to pay the price of the shares by the time stipulated in the arbitration award.”
According to a Bloomberg report, France Telecom must bid for all remaining shares in ECMS if it wants to buy more than 2% of the company from the open market, Egypt’s Capital Market Authority said yesterday.
Khaled Seyam, the Egyptian regulator’s deputy chairman, was quoted as saying that “it is not allowed for any company that owns more than 33% of another company to buy more than 2% in 12 months unless it was through an obligatory tender offer for all shares.”