FT, Orascom reveal more details of truce

France Telecom and Orascom have disclosed more details of their settlement agreement over the ownership details of mobile carrier ECMS, which operates as Mobinil.

The move comes after additional disclosure was demanded last week by Egypt's financial supervisory authority.

France Telecom will still be free to appoint the majority of members of the ECMS board under the joint agreement, the parties said.

But the main sticking point of the original agreement – that in case of a deadlock between Orascom and France Telecom board delegates from either party may buy the other's stake through a bidding process – has been resolved.

If deadlock occurs in future, Orascom will have a right to put its shares to France Telecom. This gives Orascom the right to choose whether to transfer its shares, but in return Orascom cannot increase its direct stake.

The price will be based on a weighted average derived from on-market trading figures, not any long-term valuation of Mobinil, the parties informed the regulator.

And for accounting purposes, France Telecom will fully consolidate its investments in Mobinil and ECMS into its financial results, whereas Orascom will consolidate its investment as a separate line item using the equity method.

 

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