The Egyptian Stock Exchange has suspended trading of shares of mobile operator Mobinil and Orascom Telecom Media and Technology (OTMT) at the request of the country’s regulatory authority, the exchange said in a Thursday statement.
The Egyptian Financial Supervisory Authority is deciding whether to approve France Telecom's plan to purchase most of OTMT's stake in Mobinil for 1.5 billion euros. Recent media reports have said the government regulator was poised to reject the deal, or at least delay it until the French firm responds to an information request.
Under the terms of the plan, France Telecom would buy most of Mobinil’s shares held by OTMT, the holding company of billionaire entrepreneur Naguib Sawiris. France Telecom is already Mobinil’s largest shareholder and has looked to Egypt as a key country in its effort to expand into high-growth emerging markets in Africa and the Middle East.
The head of the supervisory authority, Ashraf al-Sharqawy, has said the watchdog would give its response this week. In a brief interview with Reuters, Sharqawy denied media reports that the regulator had either rejected the offer or delayed its decision for 48 hours to await France Telecom’s response.
“The Egyptian Financial Supervisory Authority has not and will not comment on the offer,” he said. “When there is a decision, it will be announced to everyone at the same time,” he added, without providing any details of when the decision would be made.
The deal, which came out of a preliminary agreement struck in February, recasts the terms of France Telecom’s relationship with Sawiris, who had a put option to sell out completely to the firm starting in September 2012.
France Telecom would end up owning 95 percent of Egypt's largest mobile operator if all the minority shareholders accept the deal, while Sawiris would retain 5 percent. Egyptians will retain six of 13 seats on Mobinil’s board and the same voting rights as before. The new accord will also put into place a new system of call and put options through 2017 to set the terms under which Sawiris' OTMT can fully divest in the coming years.
