France Telecom will gain full ownership of the holding company that controls Egyptian Co for Mobile Services, ECMS, Egypt’s biggest mobile-phone provider, after an arbitration panel ruled in its favor in a dispute with Orascom Telecom Holding.
Cairo-based Orascom said that it must sell its holding in a venture called MobiNil Telecom, which owns a 51% stake in ECMS to France Telecom following a ruling by the International Court of Arbitration of the International Chamber of Commerce (ICC) , which has ordered it to sell its entire stake in MobiNil for approximately $1.7 billion by April 10.
France Telecom already holds 71.25% of MobiNil and said the deal will provide it with additional annual revenue of over E360m ($488.26m) and EBITDA of E165m ($224m).
According to France Telecom, in 2007 it initiated an arbitration against France Telecom at the Arbitration Court of ICC. Both entities are shareholders of Mobinil. Orascom Telecom sought an award ordering France Telecom to transfer its Mobinil shares to Orascom Telecom.
Recently the Arbitration Court issued an award rejecting Orascom Telecom’s claims and condemning it to transfer its entire stake in Mobinil to France Telecom.
Further to the acquisition of the Orascom Telecom stake in Mobinil for approximately €530 million, France Telecom will have full control over the leading mobile operator in Egypt. France Telecom will therefore be able to consolidate the entire financial results of ECMS. On the basis of the 2008 results, this represents additional annual revenues of over €360 million and EBITDA of €165 million.
