Egypt said on Sunday it wanted Orascom Telecom and France Telecom to patch up an ownership row over Mobinil but said the French firm had agreed to find a new Egyptian partner if Orascom sold its stake.
Mobinil has been at the center of a long and often acrimonious dispute between its two main shareholders, Orascom and France Telecom, after the case was taken to arbitration and the court said the French company should buy Orascom's stake.
After rejecting three offers from a France Telecom unit to buy other freely traded stock, Egypt's regulator agreed on Thursday to the unit's latest offer of 245 Egyptian pounds ($44.90) for each outstanding Mobinil share.
Orascom said it opposed the regulator's decision.
The Communications Ministry said in a statement it “continues to hope ... that the two parties in the commercial dispute reach a conciliatory solution that allows them to continue in their successful partnership” in Mobinil, Egypt's biggest mobile operator by subscribers.
But the ministry said France Telecom had agreed to find another Egyptian partner or alliance if Orascom sold.
The deal, if implemented, could net Egypt-based Orascom more than $1.6 billion but would remove it from its home turf.
Orascom said it had sent a letter to the bourse objecting to the ruling and that it was planning its next moves.
“We are going to communicate in the coming days an action plan that will outline our next steps,” Orascom Telecom spokeswoman Manal Abdel Hamid told Reuters without elaborating.
Al Gomhuria daily reported on Sunday that Sawiris had said he would not sell. Orascom later denied Sawiris commented to the paper but has previously vowed not to give up his firm's stake.
The latest twist in the row has erupted ahead of this week's visit by Egyptian President Hosni Mubarak to Paris for talks on a range of regional and other issues.
Mobinil shares surged 15.9% to 238.64 pounds on Sunday, the first trading session after the regulator's decision on Thursday. Orascom shares leapt 15.8%, while the benchmark index was up 6.3%.
“I think (Sawiris) won't let go easily which could mean he could go into lawsuits to stop this decision or enter international arbitration,” CI Capital analyst Amr Elalfy said.
He said Orascom was unlikely to make any higher counter offer for outstanding shares, particularly after it was told by Algerian tax authorities it owed $596.6 million in outstanding taxes and penalties.
Orascom said on Sunday it would seek shareholder approval to raise $800 million in a rights issue to strengthen its balance sheet and ensure liquidity to meet financing needs if there was no immediate resolution to the Algerian tax issue.
Orascom, which has mobile phone operations stretching from North Africa to North Korea, has said the Algerian tax ruling was unfounded and that it would challenge it.
The regulator, Egyptian Financial Supervisory Authority, said on Thursday it had approved France Telecom's latest offer for Mobinil, whose stock closed at 205.97 pounds last week before the news broke.
Orascom took its dispute over Mobinil to arbitration in 2007. The court ruled in April that France Telecom should buy Orascom's stake in their holding company, which owns 51% of Mobinil, for about 273 pounds for each holding firm share.
That deal was not finalized due to disagreement over the implications for the other shares.
The regulator had rejected three other offers from the French firm as too low but on Thursday said it agreed with France Telecom's argument that shares in the holding company were worth more than other shares because it had received dividends it had not distributed and charged management fees. (Reuters)