Sinking sands: France Telecom's Egyptian plans
Another attempt by France Telecom to lift the company into the ranks of the major players in the cell phone business seems to be running into problems.
The company, which had been looking to acquire the Egyptian mobile operator ECMS, has had its bid turned down for a second time by the national regulator, which said the offer was unfair. Last year, FT walked away from a €34 billion ($47.6 billion) offer to acquire TeliaSonera, the Scandinavian operator.
FT's CEO Didier Lombard said the company would use national and international legal avenues to try to overturn the regulator's ruling. However, if the regulator's decision stands, then FT would drop plans to buy the rest of the ECMS shares.
FT's attempts to enter the Egyptian market have been thwarted by a dispute with Orascom, which holds a 28.75% share in MobiNil Telecom. The local regulator previously stated FT must bid for all of ECMS as part of its purchase of MobiNil Telecom shares.
Separately, FT has been forced to make statements to the financial community at its AGM that it is not at risk of breaching any of its covenants, and that the €36 billion ($50.26 billion) of net debt held by company is not at risk of being upheld.
For a review of the history behind FT's bid for ECMS see: Interactive Investor