Orascom Telecom (OT) filed a court appeal requesting that a sale of its shares in mobile operator Mobinil be rescinded because the buyer, France Telecom, had not met the conditions for the deal.
OT said it had asked a Cairo court to cancel the sale of part of its shares in Mobinil to France Telecom as the French operator had failed to pay the price of the shares by the time stipulated in the arbitration award, and related damages. Under an arbitration ruling issued in March, Orascom is obliged to sell the French company its 28.75 percent stake in Mobinil at a price of EGP 441.66 per share.
Orascom accepted the ruling but argued that under Egyptian law, France Telecom would also have to buy Orascom's 20 percent direct stake and other minority shareholdings in the Mobinil operating company ECMS at an "equivalent" price of EGP 273.26 per share. France Telecom rejected Orascom's argument, insisting that its compulsory tender for ECMS shares was not covered by the same price formula stipulated in the arbitration ruling for the Mobinil holding company.
The French operator instead offered to buy up minority stakes in ECMS at EGP 200, a 33 percent premium to its share price on 5 April. However, this offer was deemed too low by the Egyptian stock market regulator so France Telecom last week came back with an offer with a higher premium.