CAIRO: Orascom Telecom (OT) and France Telecom (FT) said they had a broad deal to end a battle for control over Egypt’s Mobinil and would finalize a new shareholder’s pact in weeks.
Both sides met Egyptian regulators on Wednesday to present the plan that would resolve the bitter three-year spat, which played out in arbitration courts from Europe to Egypt and at times inflamed nationalist passions as Orascom’s influential owner Naguib Sawiris vowed not to cede to French pressure.
According to a joint statement on Wednesday night, France Telecom and Orascom “will continue their partnership on a renewed basis . implementing a revised shareholder agreement, but with no change to the existing ownership structure or their shareholders’ voting rights.
“We have a master agreement signed, France Telecom’s deputy chief executive officer Jean-Yves Larrouturou told a joint news conference with Orascom in Cairo.
“We are here with something which is clearly defined, even if some points are still to be finalized in the coming weeks.
Orascom Chief Executive Officer Khaled Bichara said that, although some “important details remained, both sides would “continue to work in good faith to finalize everything.
The French company and Orascom have been locked in a long-running row for control of Egyptian Company for Mobile Services (ECMS), known by its brand name Mobinil, Egypt’s largest mobile operator by subscribers.
An Egyptian court upheld a ruling on Saturday blocking France Telecom from gaining full control of the company, a move analysts say heightened the need for a negotiated settlement.
Orascom took France Telecom to a Geneva-based arbitration court in 2007, which ruled in April 2009 that Orascom should sell its minority stake in their shared holding company that owns 51 percent of ECMS.
The decision was not implemented, as the firms disputed the ramifications for the remaining shares, including Orascom’s 20 percent direct stake.
The subsequent dispute was played out in Egyptian courts, which blocked the French company’s third tender offer for the free float shares after regulator approval late last year.
Investors are likely to view the negotiated settlement positively, according to two analysts.
“I think it is positive that an agreement has been reached and that the market’s attention will be redirected back to Mobinil as an operation, said Delilah Heakal, an analyst from Cairo-based Pharos Securities.
Asked before the announcement, Paris-based analyst said markets would view it positively if France Telecom was able to resolve the Mobinil spat.
“Overall, if you look at what France Telecom has done in the past year – a merger in the UK, a deal in Switzerland, and now if they can resolve the Egypt issue – it all goes in the right direction, the analyst said. “The company should be able to reap the rewards of these decisions this year.
In addition to resolving the ownership dispute, the agreement will allow Mobinil to enter into the broadband business by merging with Orascom’s Internet service provider LINKdotNET. That part of the deal must still be approved by ECMS “corporate bodies, according to the statement.
“The acquisition of LinkDotNet is a very important part, from a business standpoint, of this agreement, said France Telecom deputy chief executive officer Jean-Yves Larrouturou at a news conference in Cairo. “It really creates new possibilities for the services we will offer to our customers.