MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
Orascom Telecom Drops Legal Action Against France Telecom in Egypt
Egypt's Orascom Telecom Holding (OTH) says that it has dropped its legal action against France Telecom (FT) over their disputed shareholding in Egyptian mobile network operator, Mobinil. The two companies have been in dispute over their shareholding in the mobile operator ever since a court ruling seemed to require OTH to sell its stake to France Telecom.
OTH said in a statement that the proceedings before the Economic Court against France Telecom and certain of its subsidiaries are no longer necessary in light of recent public pronouncements by France Telecom, which make it clear that, regardless of the fact that the 30 days period (as extended) under the sale contract arising out of the Award has lapsed, France Telecom has no intention of extending a public tender offer on the same terms as those contained in the Award and is therefore not in a position to conclude the sale as mandated by the ruling of the Capital Market Authority issued on 7 April 2009 in any event.
To avoid unnecessary costs and in an amicable gesture to focus attention on the business of running Mobinil, Orascom has decided to discontinue the proceedings before the Economic Court. Orascom had previously announced on May 19th, 2009 that it has filed a case before the Appeal Division of the Economic Court, North Cairo Circuit, requesting, as its primary claim, a declaration that the share sale agreement arising out of the arbitration Award issued on the 10th of March, 2009 has been rescinded due to France Telecom's (and its subsidiaries') failure to pay the price of the shares by the time stipulated in the arbitration award, and related damages. Orascom has reserved all its rights, including its claim for damages, but added that it hopes that further litigation can be avoided.