CAIRO: Orascom Telecom Media and Technology is in discussions with France Telecom over the future of their Egyptian venture Mobinil, a person who said he was familiar with the discussions told Reuters.
France Telecom, which declined to comment, is the biggest shareholder in Mobinil and the second biggest is the family of Egyptian businessman Naguib Sawiris, who has a put option to sell his holding in Mobinil to the French company.
Shares in Egyptian Company For Mobile Services (ECMS) , Mobinil’s listed entity, tumbled 52 percent last year as Egypt was gripped by a popular uprising that sent the economy reeling. The stock is now worth just over half of what France Telecom might have to pay for it if Sawiris exercises his option later this year.
Mobinil said it had no information on any talks about its future.
Its founder Sawiris sold most of his telecom assets last year to Russia’s Vimpelcom in a $6 billion deal, but his Mobinil stake was not included.
He created a new vehicle, Orascom Telecom Media and Technology (OTMT), to house the stake and other assets left out of the Vimpelcom deal.
The spin-off to create OTMT was completed last month after being delayed by a legal challenge from some minority shareholders.
"There are ongoing discussions with France Telecom to discuss future relations after the demerger and the change of ownership," the person said on condition of anonymity.
The person said France Telecom was now raising "new issues" in regard to the delay in the demerger of Mobinil and the new ownership structure.
Sawiris declined to comment when contacted by Reuters.
Unconfirmed talk of possible changes to the relationship between Sawiris and France Telecom has sent shares in Mobinil and OTMT soaring in recent weeks, with heavy volumes changing hands.
OTMT was suspended after jumping 6.9 percent to 1.40 pounds on Thursday, and Mobinil leaped 10 percent to 137.89 pounds. They were the most heavily traded stocks on the Egypt Exchange.
France Telecom owns 71.25 percent of Mobinil Telecommunications SAE, which has a 51 percent stake in ECMS.
Sawiris’s put option, part of an agreement in 2010 that ended a battle with France Telecom for control of Mobinil, allows him to sell his ECMS stake to France Telecom for between 221.7 pounds and 248.5 pounds per share, depending on the timing.
He can also sell his shares in Mobinil Telecommunications to the French company.
ECMS, which is also known as Mobinil, has a market value of LE 11.66 billion ($1.93 billion), according to Reuters data.