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Telco chief gives FT more time to ink deal

THE chairman of Orascom Telecom Holding SAE said yesterday that he has extended for 72 hours the deadline for France Telecom to complete its purchase of the region's largest mobile phone firm by users, or the deal is over.

An international arbitration court had ruled in March that Orascom must transfer to FT its 28.25-percent stake in Mobinil Telecom, a holding company in which FT owns an 81.75-percent stake.

Mobinil Telecom itself holds a 51-percent interest in The Egyptian Company for Mobile Services.

The deal, however, has hit repeated obstacles as Orascom and FT argue over whether the Paris-based telecom giant is required to extend a 100-percent mandatory tender offer for all of ECMS. Further complicating the discussions is that FT had proposed two different prices.

In a press conference yesterday, Naguib Sawiris, chairman of Orascom Telecom Holding SAE, criticized what he described as "childish" behavior by FT.


"I didn't want to do this," Sawiris said, referring to the deadline extension. "I was coming today (Monday)... to tell you that they did not comply and the ruling is over."

"But we said we would follow legal advice and provide proof of good faith for the last time," Sawiris said, adding that after tomorrow's deadline, he would "consider that the arbitration court ruling is null and is no longer binding on us."

Egypt's Capital Market Authority on April 7 sided with Orascom's interpretation that FT must submit a mandatory tender offer for all of ECMS's shares, which included a 20-percent direct equity stake held by the Cairo-based firm and the remaining 29-percent free floating shares. At a proposed share price of almost 274 Egyptian pounds (US$49), the deal was valued at US$1.7 billion. FT disputed the interpretation which it said left it "not obliged by law or by market practice to launch a mandatory buyout offer."

Sawiris disputed what he said were claims by FT that Orascom had failed to meet the deadline for transferring its minority stake in Mobinil Telecom, saying that FT itself had failed to pay for the shares, which would have triggered their release.

Sawiris said he would abide by the Arbitration Court of the International Chamber of Commerce's ruling.



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