The two epic mammoth battles that have dominated headlines for months continue.
In the first instance, France Telecom says it won’t make a bigger offer to buy Osracom’s stake in ECMS, Egypt’s largest mobile phone operator, the Financial Times reports.
France Telecom and Orascom have been squabbling over the French operator’s attempts own ECMS (and its 21 million subscribers) outright since 2007 – they assumed joint ownership in 2001 – amid many claims and counter-claims of failure meet agreed or arbitrated conditions.
The two companies control ECMS via Mobinil, a company that owns 51% of the Egyptian mobile operator. France Telecom owns 71.25% of Mobinil and Orascom the rest. Orascom also owns 20% of ECMS directly.
In March, an arbitration court, sponsored by the International Chamber of Commerce, ruled that Orascom should sell its stake to France Telecom for €517 million ($725 million).
But, as the FT explains, the Egyptian securities regulator has in effect blocked the transaction by saying the transaction must take place in tandem with a tender offer to minority shareholders at ECMS, which is listed on the Cairo stock exchange.
Egypt’s Capital Market Authority has rejected two offers by France Telecom to the minority shareholders on the grounds they were too low. The most recent offer was worth €1.5 billion ($2.1 billion).
France Telecom has repeated its previous stance that it is ready for as long a legal battle as necessary to secure its rights (and control of ECMS) and continues to accuse the Egyptian authorities of overriding international law and consequently damaging future investments into Egypt.
In the second epic struggle, Russian bailiffs have agreed to hold off on the sale of Telenor’s shares in VimpleCom until the court in the West Siberian city of Tyumen has reached a decision, according to Dow Jones Newswires. Reuters reports that the court has adjourned the case until 30 September.
Telenor today said any deal with Alfa Group to resolve the dispute over jointly-owned mobile ventures in Russia and Ukraine must wait until the Russian court case brought by Farimex is solved. Telenor maintains that Farimex is an off-the-shelf, British Virgin Islands company with less than a 1% stake in Alpha, that is being used by Alfa Group for unfounded gain. Alfa Group is owned by an oligarchy of Russian billionaires.
Telenor and Alfa have joint ownership of VimpelCom and also Kyivstar in Ukraine. Farimex is suing Telenor for delaying the progress of Kyivstar in Ukraine.
In this complex, protracted case, the bailiffs had frozen the shares as collateral against the $1.7 billion damages the court awarded against Telenor by the Siberian court in favour of Farimex. Under the country’s law, the bailiffs could have sold the shares before Telenor had the chance to appeal.
Telenor has prevailed on the Russian Prime Minister, Dmitry Medvedev, to see that justice is done and the principles of international law upheld in the interests of encouraging investors into Russia.
