The Egyptian Co. for Mobile Services possibly will issue bonds valued at US$175 million. According to Chief Executive Officer Hassan Kabbani, The Egyptian Co. for Mobile Services may issue bonds valued at US$175 million. The Cairo-based company that operates under the brand Mobinil plans to use the proceeds to fund network expansion. The time frame for the sale is yet to be disclosed.
Mobinil sold 2.32 billion U.S. dollars of bonds this year with the institutional portion having 1.5 times more offers than bonds available, and the sale to individual investors being 11.4 times oversubscribed.
According to Kabbani, the first issue was a huge success, the company got a positive reaction and that’s why the company is thinking of a second issue to fund expansion. Mobinil has a very aggressive expansion plan.The company has difficulties borrowing from banks because the central bank limits how much a local company can rise from lenders and treats, Mobinil as a unit of Orascom Telecom Holding SAE when it should be considered part of France Telecom SA.
Orascom first operation was the Egyptian Company for Mobile Services commonly known as Mobinil. Mobinil is a market leader serving over 24.2 million subscribers representing a market share of 43.6% (as of September 2009). Mobinil is one of Egypt’s five largest companies on Cairo & Alexandria Stock Exchange (CASEâ€) in terms of market capitalization.
Orascom and the Paris-based company in May settled a more than two-year legal dispute over the ownership of Mobinil, keeping the ownership structure unmoved.
www.WirelessFederation.com/news: Expressing its focus on the main emerging markets, France Telecom’s Chief Executive Officer, Stephane Richard, announced that his company is “ready to pay a good price” to grow further in Africa.
Introduction of broadband to both mobiles and fixed-lines in Egypt, where France Telecom controls the country’s largest mobile operators by the number of subscribers is also on the cards of the operator.
According to Richard, the firm wants to bring to the Egyptian market the innovations that the group has in the world and it is the sole reason why it wants to bring broadband into both mobile and fixed-lines into Egypt.
Stephane Richard was in Cairo to announce a deal with Egypt’s Orascom Telecom over their joint ownership in Egyptian mobile operator ECMS, which is also known by its brand name Mobinil.
www.WirelessFederation.com/news: Results of Egyptian mobile-phone operator MobiNil Telecom will be fully included by France Telecom SA in its accounts following an accord with co-owner Orascom Telecom Holding SAE.
According to the company, the 300 million fee that France Telecom agreed to pay Orascom covers termination of a previous shareholders’ agreement and compensation because Orascom can no longer consolidate MobiNil results under the amended deal.
Explanation of the fee was demanded by Egypt’s financial-market regulator from Paris-based France Telecom and Cairo-based Orascom, last week. The decision was taken as MobiNil’s ownership structure was left unchanged after the settlement was announced by the companies on April 15.
Minority shareholders in Egyptian Co. for Mobile Services will not be affected by minority shareholders. Orascom received a put option to sell its shares in MobiNil and Egyptian Co. for Mobile Services to France Telecom as a part of the changed shareholders’ agreement.
www.WirelessFederation.com/news: 2% drop in the first-quarter profits has been reported by ¬Egyptian mobile network operator, Mobinil falling up to EGP 357 million (US$64 million) compared to a year ago. Revenues went up to EGP2.55 billion (US$457 million) rising by 2% and the subscriber base reached 26.121 million.
According to Alex Shalaby, Chairman, the first quarter, has seen a continuation of the intense challenges driven by the global economic slowdown, regulatory pressures, and aggressive competition and in spite of these factors Mobinil continued to grow its subscriber’s base and revenue.
Due to aggressive competition in the market, in the first quarter, ARPU reached EGP 32 with a decline of 18% over the same period last year, EBITDA reached EGP 1 billion with a decline of 12% over the same period last year on a comparable basis reflecting an EBITDA margin of 40.1% and capital expenditure reached EGP 332 million versus EGP 420 million for Q1 2009.
www.WirelessFederation.com/news:? The mobile operations of Russia’s state-controlled telecoms holding, Svyazinvest will get an efficient partner in the form Swedish telecom operator Tele2 AB. The announcement was made by Tele2′s chief in Russia, Dmitry Strashnov. The main assets of Svyazinvest are seven regional fixed-line operators, but many of these have mobile businesses that together have 16 million mobile subscribers.
Restructuring Svyazinvest is currently going on by the Russian government and has also revealed its plans to merge the assets of the company into a single business and Tele2 is one potential partner with just over 15 million users in Russia.
According to Dmitry Strashnov, Tele2′s chief in Russia, the only efficient way to integrate Syvazinvest’s operations with Tele2′s would be using the Swedish company’s business model and managerial oversight.
www.WirelessFederation.com/news:? A global settlement fee of $300 million will be paid by France Telecom to Orascom Telecom Holding as part of an agreement between the two companies on Egyptian mobile operator Mobinil. This will put an end to a protracted dispute between the two telecom operators.
The fee will be paid after the shareholders’ agreement has been amended and restated and it comes fully into force. The current ownership structure in the agreement with Orascom is not being changed.
As per the agreement, Egyptian Co. for Mobile Services, or ECMS, which is commonly referred to as Mobinil, is 51% owned by a holding company also called Mobinil, which in turn is 71.25% controlled by France Telecom, and 28.75% by Orascom Telecom.
The partnership between the two companies will continue but France Telecom will consolidate 100% of ECMS’s results compared to 70% before.
UPDATE 1: Reuters reported that a source in the Algerian government has disclosed that MTN and Orascom are in discussions and Orascom is required by law to inform the government of any such activity. A senior source at the Algerian government also confirmed that they take a positive view of the sale and may bless the deal.
Djezzy is an attractive asset with approx 60 percent market share (penetration is 72 percent) and average EBITDA margin of 60-63 percent.
May 26, 2010 : Orascom Telecom and MTN are in talks with each other wherein MTN will buy Orascom’s African subsidiaries. No deal has yet been finalized, but an announcement could come pretty soon.
MTN confirmed in a statement that it is in talks that may or may not lead to a transaction,â€ but didn’t name Orascom specifically. MTN approached banks for $5bn to help fund the acquisition of units from Orascom in a deal that may be worth $8 billion. Also, trading in Orascom’s global depositary shares in London has been suspended pending an announcement by the company.
Initially the talk was limited to MTN buying Orascom’s Algerian subsidiary Djezzy. But now the talk has been expanded to include most of its African businesses i.e Algeria, Tunisia (may be), Burundi, Central African Republic, Namibia and Zimbabwe. MTN is generally thought to be after Orascom’s Telecel Globe, which manages the Orascom’s Sub-Saharan African units, for a while now, which among other things would give it inroads into Zimbabwe, something MTN has been looking for. MTN does not seem to be very keen to buy Orascom’s minority stake in Egypt’s leading mobile operator, ECMS (Mobinil).
MTN wants to add new markets to its 21 countries across the Middle East and Africa while also consolidating its position on the continent.
Orascom reported group turnover of $5.1 billion for 2009, down 5 per cent compared with last year. Pre-tax profit dipped 18 per cent to $740.3 million. Orascom last week settled a dispute with France Telecom over ownership of ECMS (Mobinil). Orascom’s Algerian business, Djezzy is the biggest profit generator among its African assets. But Orascom’s chairman, Naguib Sawiris has been considering selling it since the Algerian government issued Djezzy with a $597m tax bill last year. This brought a major dip in Djezzy profits in the fourth quarter results for 2009.
www.WirelessFederation.com/news: The long standing legal battle between France Telecom and Egypt’s Orascom Telecom for control over Egyptian mobile operator ECMS, commonly known as Mobinil has finally come to an end.
A ceasefire has been reached by both the operators ending all disputes over their joint investment. Without changing the existing ownership structure or voting rights, a revised shareholder agreement will be drafted by the telcos.
Currently, Mobinil is 51% owned by Mobinil Holdings, which is 71.25% controlled by France Telecom and 28.75% by Orascom while 20% direct stake in Mobinil is controlled by Orascom.
The recent move by France Telecom indicates a change in approach of the new CEO Stephane Richard as compared to the predecessor Didier Lombard, who was determined not to cede to Orascom.
www.WirelessFederation.com/news: Verdict preventing France Telecom SA from gaining full control of the Egyptian Co. for Mobile Services, Mobinil has been upheld by an Egyptian court under which Orascom Telecom Holding SAE has been allowed to keep its stake in the Egyptian company.
According to Hamdi Yassin, the presiding judge in the case, France Telecom’s offer to buy the outstanding shares in the Egyptian Co. at 245 Egyptian pounds ($44.4) per share is unfair to minority shareholders and France Telecom can appeal to a higher administrative court in the next 60 days.
As a reason for the verdict, the court has cited that France Telecom’s $2.2 billion bid for the outstanding shares of Mobinil, is 28 pounds less per share than an offer made to Orascom Telecom Holding SAE in an arbitration ruling last year in the French company’s favor.
France Telecom offered lower price as the price of Mobinil shares were very high because of undistributed dividends and high management fees. The regulatory decision was overruled by the court on January 13 citing France telecom reason as legally baseless one, a decision reiterated by the administrative court today.
www.WirelessFederation.com/news: France Telecom’s effort to take over Egypt’s largest mobile phone operator might face a stiff challenge from its own partner Orascom Telecom Holding SAE. Orascom might also fight against Egyptian court ruling against the company.
A complicated battle has risen between the two companies for control of two companies- Mobinil, which Orascom Telecom and France Telecom jointly own, and Egyptian Company for Mobile Services, which has a broader shareholder base and operates the Mobinil brand in Egypt.
Decisions will be taken by an administrative court at Egypt’s State Council on Saturday on whether France Telecom can proceed with a tender offer for the shares in ECMS it doesn’t already owns.
According to Orascom Telecom CEO Khaled Bichara, the company will continue to oppose France Telecom’s separate effort to buy out Orascom Telecom’s stake in Mobinil, which holds a controlling stake in ECMS but added that the company continues to seek a negotiated solution to the standoff.