Mobinil says lending restricted by Orascom link

CREDIT LIMIT: Mobinil says Egypt's central bank is limiting its ability to borrow. (Getty Images)

Egypt's central bank is limiting Mobinil's ability to borrow by linking its credit to that of one of its main shareholders, the group's chairman said on Tuesday.

"When we go to banks to borrow, they say we have our credit limit under the Orascom group," Alex Shalaby told reporters on the sidelines of a telecoms conference. "We really are not Orascom and are not controlled by Orascom."

Under Egyptian banking laws, banks are allowed to lend only a certain portion of their total loans to any one client.

Mobinil is the focus of an ownership dispute between its two largest shareholders, Cairo-based Orascom Telecom and France Telecom , that was brought to arbitration in 2007. Each own a roughly 35 percent stake.

Shalaby said the banks were working under a central bank definition of Mobinil as part of a single entity with Orascom. He did not say whether any recent lending had been declined on this basis.

Shalaby also said his firm, Egypt's largest mobile operator by subscribers, had teamed up with an unnamed European bank to apply for a mobile banking licence.

"It is just (waiting for) a green light from the central bank to proceed," he said, adding that Mobinil expected a decision by the end of the year. "Certainly that is our expectation and our hope."

Hesaid Mobinil had purchased the bid documents for "triple play" licences the government announced last month, but would not be able to apply for one of the two licences on its own.

"This is not the purview, or the best application of knowledge and experience, of a sole mobile operator," he said.

The licences will allow winning bidders to provide new residential compounds with packaged fixed-line, internet and cable television, but will likely involve leasing of infrastructure from existing operators including landline monopoly Telecom Egypt.

Shalaby said if the firm decided in the weeks and months ahead to submit a bid it will then seek qualified partners.

"It's too early, we are not in talks today," he said. "Certainly at some point, if the decision is made that yes we want to be part of this, either we will be seeking out consortium members of qualified parties that are interested in the same things we are interested in, or they will seek us." (Reuters)

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