Orascom Telecom Holding, the biggest mobile phone company in the Middle East, has confirmed it has dropped court proceedings in Cairo against France Telecom over a dispute about ownership of Egyptian Co. for Mobile Services - better known as Mobinil.
The company said in an e-mailed statement, reported by Bloomberg, that it dropped the case because France Telecom had recently indicated it wouldn’t extend a tender offer on the same terms to Mobinil shareholders after it was awarded the right to buy Orascom’s stake in a holding that controls the Egyptian mobile phone service operator.
Orascom also has its own, direct 20 percent stake in Mobinil.
Orascom also indicated it had stopped the case in the appeal division of an economic court ''to avoid unnecessary costs and in an amicable gesture to focus attention on the business of running Mobinil.''
The decision marks a major u-turn after Orascom chairman Naguib Sawiris said in comments a couple of weeks ago that France Telecom was ''in the business of value destruction".
Sawiris said FT's head of international operations, Jean-Yves Larrouturou, was prepared for a five-year legal battle despite acknowledging that Mobinil's value would be affected.
The billionaire businessman added that while the row was affecting morale at Mobinil, it had not impacted operations, adding that the two parties had a good relationship at the operational level.
Beatrice Mandine, a France Telecom spokeswoman in Paris, said when contacted by telephone on Sunday: ''We are not surprised by the decision taken today since it was not in favor of Orascom, as we have explained several times.''
She added, ''We are open for discussions to find an agreement.''
On April 5 Orascom said an arbitration court had ordered it to sell its 28.75 percent holding to France Telecom at a price equivalent to 273.26 Egyptian pounds ($49) per share. France Telecom owns the remaining 71.25 percent.
The order marked the culmination of an undisclosed dispute between the company and France Telecom that had been brought before the International Court of Arbitration at the International Chamber of Commerce back in 2007.For all the latest tech news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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