MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
France Telecom and Orascom Telecom Holding Agree to Settle Egyptian Dispute
France Telecom and Orascom Telecom Holding have presented a joint plan to resolve their long running and acrimonious dispute over the ownership of Egyptian mobile network, Mobinil. The agreement, which has been signed last week and will be finalized over the coming weeks, will effectively bring to an end all disputes in relation to their joint investment in Mobinil.
In a statement, FT said that the two groups will continue their partnership on a renewed basis going forward, implementing a revised shareholder agreement but with no change to the existing ownership structure or their shareholders' voting rights.
The agreement also includes the integration of LINKdotNET - the leading ISP in Egypt - into their holding company, ECMS, allowing the company, subject to the approval of its corporate bodies, to extend broadband and corporate communications services to its 26 million customers; and create value for its shareholders and its 3,500 employees. Dr. Tarek Kamel, the Minister of Communications and Information Technology welcomed this step as the merge between the mobile services and internet services.
Stephane Richard, CEO of France Telecom, said: "I am very satisfied that we have reached an agreement with an entrepreneur such as Naguib Sawiris. Our two groups will now be able to continue working together in order to further contribute to the development of telecommunications services and information technology in Egypt. This market is very important for France Telecom and we will continue to invest and contribute our know-how in the years to come. In addition, this will also reinforce our commitment to maintain a strong R&D and Orange Business Services presence in Egypt."
As a result of the amended shareholder agreement, France Telecom will change its accounting method and will fully consolidate ECMS (ECMS was consolidated through proportional integration in 2009 and before).
The amended shareholder agreement will avail Orascom Telecom Holding operational rights commensurate with its co-owner and strategic partner position, in addition to protection and liquidity rights. Going forward, Orascom Telecom Holding will consolidate its participation in ECMS through equity method.
The outlined agreement will include settlements for all the disputes between the shareholders, the details of which will be communicated once the comprehensive agreement has been finalized.
(Source: Cellular News)