Orascom Telecom could face a lengthy delay in its sale of its stake of roughly 29 per cent in Mobinil to France Telecom, which owns 71 per cent of Egypt's largest mobile firm.
Orascom to challenge latest ruling on its sale?
Orascom Telecom could face a lengthy delay in its sale of its stake of roughly 29 per cent in Mobinil to France Telecom, which owns 71 per cent of Egypt's largest mobile firm, as it appeals a ruling by the nation's financial regulator over the price of the shares. On Saturday, an appeals committee of the regulator formally rejected a request by Orascom that the regulator block France Telecom's latest bid for the Mobinil shares.
Orascom, based in Egypt, said it was "disappointed" with the regulator's decision and that it maintains its position that the arguments made by France Telecom are "incorrect and illogical". Orascom and France Telecom have been at odds over Mobinil since 2007. Last April, the Administration Court decided that a fair price for Mobinil was 273 Egyptian pounds (Dh183) per share, or a total of US$1.6 billion (Dh5.87bn) for Orascom's holding.
Last month, the regulator overruled the court's decision and priced Mobinil at 245 Egyptian pounds a share. Orascom Telecom, the largest mobile phone company in the Middle East, plans to file its legal suit by January 14, the deadline for France Telecom to buy the Mobinil stake. In the meantime, Orascom said it will "continue amicable negotiations" with the French company. "Given that the tender offer period should end soon, on January 14, it seems uncertain whether Orascom Telecom will be able to find a quick legal solution to the issue or not, since the due legal process might be lengthy," said Shrouk Diab, a telecommunications analyst at Beltone Financial in Cairo.
Amr Elalfy, a telecoms analyst with CI Capital Research in Cairo, said a final decision on Mobinil could take some time if the court agrees to freeze France Telecom's purchase offer. "According to the legal system in Egypt, a decision made by the Administrative Court can still be appealed before the Supreme Administrative Court, so we could be in for a lengthy legal debate," Mr Elalfy said. The two companies first went to court in 2007 over Mobinil, Egypt's largest mobile firm by subscribers.