CAIRO: France Telecom said Thursday that it, along with Orascom Telecom, contacted Egyptian regulators about transferring Orascom s shares in Mobinil, Egypt s largest mobile phone service provider by subscribers. The announcement came a day after Orascom said France Telecom had failed to meet a new April 15 deadline proposed by the Egyptian telecom giant s chief executive for the Paris-based firm to submit payment to buy Mobinil, in line with an arbitration court ruling. Orascom CEO Naguib Sawiris had said there would be no further extensions beyond the additional 72 hours he proposed. If FT failed to comply, Orascom said it would consider the verdict no longer in effect. Yesterday, France Telecom and Orascom Telecom have submitted together a file to competent share-trading committee at the Egyptian stock exchange in view of executing the transfer of the Orascom Telecom s shares in Mobinil in accordance with the arbitral award, said Bertrand Deronchaine, a France Telecom spokesman. The ruling by the arbitration court said Orascom must transfer to FT its almost 29 percent stake in Mobinil Telecom, a holding company that, in turn, owns 51 percent of the Egyptian Company for Mobile Services (ECMS) - Mobinil s operator. FT holds a roughly 71 percent stake in Mobinil Telecom. But Orascom, backed by Egypt s Capital Market Authority, said Egyptian law also required FT to submit a 100 percent mandatory tender offer for all of ECMS. That would include not only Mobinil Telecom but also Orascom s 20 percent direct equity interest in ECMS as well as the 29 percent free float shares. Orascom said the deal was valued at about $1.7 billion. France Telecom initially rejected the argument that it was required to buy the entire company, but later indicated that it may tender an offer for the rest of ECMS - albeit at a lower price than the 273.26 Egyptian pounds ($49) per share stipulated by arbitration order. Egyptian regulators, however, said this was not an option. Analysts said there are now two possible scenarios that could emerge given the two telecom companies latest statements and the earlier impasse. In both cases, FT would still attempt to complete the deal. In the first case, Orascom would still be reluctant to complete the deal given its firm belief that it has always been compliant to the ruling while FT wasn t, said Sally Gerges, a telecom analyst with investment bank Beltone Financial. So, it would just consider this arbitration ruling dropped since the new deadline had elapsed. In the other scenario, Orascom would ignore its earlier statements about not completing the deal after the deadline. The deal, however, would still hinge on FT submitting a 100 percent tender offer at 273.26 pounds per share, as called for by the Capital Market Authority, said Gerges. So far, FT has not publicly indicated it is willing to pay that price. In its statement Wednesday evening announcing that FT had missed the deadline, Orascom stopped short of saying what it would do next. It said the CMA told both companies to stop issuing new announcements on the matter. FT s latest statement added little clarity, with Deronchaine saying that the company wishes to refrain from any further comment as formally requested by the Egyptian Capital Market Authority in view of preventing any further speculation on the ECMS shares. The two companies earlier accused each other in dueling statements of misrepresenting the issues and escalating the disagreement in the media. Mobinil s shares have gained about 40 percent since the ruling was announced earlier this month. Its shares were trading at 201.31 pounds by midday Thursday, up over 4 percent from their Wednesday close. -Associated Press Writer Scott Sayare contributed to this report from Paris.
