Federal Court rules government unlawfully licensed Globalive
The Federal Court has effectively restored the foreign ownership restrictions of Canada’s Telecommunications Act by quashing the federal government’s decision to licence foreign-owned wireless telecom Globalive.
“The Federal Court has said that Cabinet is not above the law,” says the President of Canada’s largest telecommunications union, Dave Coles.
“If Stephen Harper and his Cabinet want to change the Telecommunication Act, they have to have the guts to go before Parliament,” he said, noting that “the decision says ‘Cabinet mis-drected itself in law’.”
The Communications, Energy and Paperworkers Union of Canada (CEP), ACTRA, and Friends of Canadian Broadcasting were intervenors in the case.
In December 2009, the federal government granted a wireless license to Globalive, a company backed by Egypt’s Orascom, overturning an earlier decision to block the permit by Canada’s broadcast regulator. The Canadian Radio-television Telecommunications Commission had rejected the application on the grounds it violated rules banning foreign control of the sector.
“Overturning the Cabinet decision is a victory for Canadian ownership rules and a victory for Canadian culture,” said Stephen Waddell, ACTRA’s National Executive Director. “Globalive was potentially the beginning of the end of our foreign ownership laws, we’re ecstatic that the courts have stopped the train in its tracks.”
The cultural coalition had intervened on the same side as Telus and Public Mobile in opposing the government’s decision. However, they were the only ones to bring cultural concerns to the table, asserting that telecommunication companies have a responsibility under the Telecommunications Act to strengthen and safeguard Canadian cultural sovereignty.
Increasing convergence between telecom and broadcasting has made the need to maintain Canadian-ownership of both even more acute. In the few months since the cultural groups were granted standing in this case two major telecommunications companies have converged with broadcasters – Shaw with CanWest, and BCE with CTVglobemedia.
“Foreign ownership was a looming threat to our entire communications industry, our ability to control our media and to protect our culture,” added Ian Morrison, spokesperson for the Friends of Canadian Broadcasting. “The federal court’s assertion that our foreign ownership rules matter has brought a sigh of relief across our entire industry.”
QTel, Princesse to Buy Orascom’s Tunisiana Stake
Qatar Telecom and Princesse Holding of Tunisia will acquire 50% of Telecom Tunisie for $1.2 billion from Orascom Telecom Holding as the Egyptian company sells assets.
According to Qtel, Wataniya, which had already owned 50% of Tunisiana, bought the remaining stake from Orascom in a consortium led by Princesse Holding of Tunisia.
According to Qtel’s Chairman Sheikh Abdullah al-Thani, the acquisition is in line with the Qtel Group’s vision … and with their strategy of active portfolio development, through which they may seek to increase their ownership in well performing assets, with further growth potential.
Wataniya and the consortium stated that it will work with Tunisian authorities to finalize the transaction and expects to close the deal with Orascom early January 2011. Wataniya will finance its portion of the deal through a mixture of cash and debt.
VimpelCom Raises Funding for Orascom Purchase: Reports (Russia, UAE)
If reports are to be believed, Russia’s VimpelCom is seeking to raise US$4 billion as a bridging loan to fund its bid for Orascom Telecom Holding and Wind Telecomunicazioni.
According to reports, citing senior bankers, the financing will be replaced with bonds at a later date. The loans will be used to fund the cash component of the acquisition for about $2 billion and to refinance $2 billion of existing VimpelCom debt. A group of three to six banks is expected to arrange the deal.
According to one of the banker close to the deal, VimpelCom is about to get a $4 billion bridge loan to bond issues – it’s extremely aggressively priced for what it is.
Under the terms of the deal between the two companies, VimpelCom will own through Weather – 51.7% of Orascom Telecom Holding and 100% of Wind Italy. Under the terms of the Transaction, Weather shareholders will contribute to VimpelCom their shares in Weather in exchange for a consideration consisting of newly issued VimpelCom common shares, US$1.8 billion in cash and certain assets that will be demerged from Orascom Telecom and from Wind Italy. The deal is valued at around US$6.8 billion in stock and cash.
Orascom’s Sawiris dubious on VimpelCom merger (UAE)
As per reports, citing Orascom majority owner Naguib Sawiris, the chances of completing a $6.6 billion merger between Orascom and Russian mobile operator VimpelCom were at best 50%.
The report quoted that Norway’s Telenor, which owns nearly 40% of VimpelCom, was not motivated to see out the merger, which faces barriers in Algeria as well as regulatory issues in other countries.
According to Sawiris, now, he doubts anything will come from the merger. Telenor is not motivated, as he sees it. Its 50-50 at best that anything will come of it.
Algeria is threatening to nationalize Orascom’s local unit, and Orascom has assets in Bangladesh and Pakistan where Telenor also has mobile operations.
Telenor has repeatedly aired doubts over the VimpelCom-Orascom deal. Last month it asked for clarification of the merger parameters before VimpelCom’s board makes a final decision on the deal.
VimpelCom investors cautious of Sawiris deal
Shareholders in VimpelCom have cast uncertainty on its $6.6bn deal to buy most of the telecoms assets of Naguib Sawiris, the Egyptian entrepreneur.
According to Russia’s Alfa Group, VimpelCom’s largest investor, it had not decided whether it wanted to proceed with the deal if the Algiers government carried out its threat to nationalize Sawiris’ Algerian mobile business.
Telenor, VimpelCom’s second-largest shareholder, signaled that it was concerned that the deal could provoke regulatory objections in Bangladesh and Pakistan, where both the Norwegian telecoms group and Sawiris have mobile businesses.
Alfa and Telenor settled to team their assets in VimpelCom, and last week it planned to combine with Weather Investments, Sawiris’ private investment company. Weather owns Wind, Italy’s third-largest mobile operator, and has a 51.7% stake in Orascom Telecom, the Cairo-listed telecoms group.
According to Algerian government statements earlier this week, it was planning to hire banks to advice on the nationalization of Djezzy, Orascom’s Algerian business.
According to Mikhail Fridman, Alfa’s chairman, VimpelCom had not yet decided whether it was interested in the Weather deal if Djezzy was nationalized.
Telenor’s concerns with the Weather deal centre on the fact that it already has mobile businesses in Bangladesh and Pakistan.
As per Telenor, it was important there were no regulatory objections to the Weather deal in those countries where the Norwegian group already owned telecoms assets. If regulators did object in a particular country, the Weather deal could fall through. Alternatively, VimpelCom could opt not to buy assets in countries where Telenor was already present.
VimpelCom inks a $6.8billion deal with Orascom, Sawiris (Egypt,Russia)
Russian mobile operator VimpelCom Ltd. has signed a deal to combine itself with Egyptian billionaire Naguib Sawiris, including almost half of Orascom Telecom Holding SAE, for US$6.8 billion in stock and cash.
The deal will be the world’s fifth-largest mobile telecom by subscribers, merging Russia’s second-biggest mobile operator with the leading player in the Arab world. It symbolizes VimpelCom’s first move in a policy of expanding abroad after its Russian and Norwegian shareholders resolved their differences.
According to earlier reports, Sawiris’s Greek unit, Wind Hellas Telecommunications SA, was excluded from the deal, which gives the Sawiris a smaller stake in VimpelCom and less cash. All of Italian Wind Telecomunicazioni was included in the merger.
According to a joint press release, Sawiris’s Weather will get 326 million new common shares, comprising a 20% economic interest and 18.5% voting interest in the larger VimpelCom group, as well as US$1.8 billion in cash. Telenor ASA’s economic interest will fall to 31.7%, with its voting interest slipping to 29.3%, while Russian Alfa Group’s Altimo holding will have 31.4% of economic rights and 36.4% of voting.
Mobinil Might sell US$175million bonds to expand funds: CEO
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.
Orascom terminates asset sale talks in Algeria with MTN
www.WirelessFederation.com/news: The talks between Orascom Telecom and MTN regarding the sale of some or all of Orascom assets have been ended after the talks failed to yield the desired results. According to the Orascom, it informed the MTN Group on June 9 of its decision to terminate discussions.
The talk between the two African mobile operators began in late April but it was opposed by Algeria’s government, which wanted to buy Orascom’s unit in that country for itself.
For the fourth time in three years, MTN has come up short in attempting to expand beyond its key markets of South Africa, Nigeria and Iran. MTN has also informed its shareholders about the termination of the talk.
Algeria to begin talks with Orascom over Djezzy
www.WirelessFederation.com/news: Algerian government is ready to start discussions regarding Orascom Telecom’s possible sale of its Djezzy unit. Algerian government has issued a letter to Orascom indicating its willingness to begin negotiations with regards to buying the company’s Algerian unit. Orascom Telecom is the largest Arab mobile company by subscribers and Djezzy is 90%-owned by Orascom Telecom directly or through subsidiaries.
In November, Algerian authorities slapped Orascom Telecom with a $600 million tax claim and penalties for fiscal years 2004 to 2007, even though Orascom’s operation was tax-exempt until mid-2007.
The government will also assign representatives on its behalf to negotiate with the company’s (Orascom) representatives. MTN Group, Africa’s largest mobile operator and Orascom Telecom have been in discussion with each other since late April regarding the possible acquisition of certain assets of the Egyptian company’s businesses.
The deal that would see MTN acquire Djezzy has been opposed by the Algerian government and has warned that any transaction could lead to the withdrawal of the business’s telephone license. Largest share of the Algerian market has been occupied by Djezzy and the single biggest source of revenue for Orascom, but at the same time it is also the most troubled unit of the telco. Income from Djezzy amounted to about $1.9 billion in 2009 for Orascom.
The key question which is making the rounds is will Orascom Telecom get a fair price as it still not known whether the parties will appoint an independent party to value the company.
Orascom Telecom’s time in Algeria has been plagued by problems. The violence that erupted after a football World Cup qualifying match between the two Arab countries last November, strained the relation between Algeria and Egypt. A crowd of Algerian football supporters attacked the headquarters of Djezzy, smashing windows and destroying office equipment after the match.
MTN, Orascom deny to comment on takeover bid (Namibia)
www.WirelessFederation.com/news: Both Orascom and MTN are tight lipped about the possible takeover bid of Orascom, the parent company of Leo – Namibia’s second largest telecommunications operator by MTN. The silence is amidst visible signs and media speculation surrounding the takeover bid.
Stanley Similo, spokesperson of Leo denied commenting on the future of the company saying that he was not in a position to comment on the on-going talks between MTN and Orascom’s parent company, Weather Investments S.P.A, which may or may not lead to a transaction.
In a statement by the company, it has been cleared that Orascom is aware that its parent company, Weather Investments S.P.A, is in discussions with MTN Group which may or may not lead to a transaction relating to the acquisition of control of Orascom and/or its businesses by MTN.
Analysts believe MTN is likely to buy Orascom’s Algerian operation, Djezzy and four of its sub-Saharan businesses. Officials at MTN have suggested the shareholders to exercise caution in trading their MTN securities until a further announcement is made concerning a possible deal. MTN which already has a presence in Namibia through its Internet services business is providing both corporate firms and small businesses with Internet solutions after acquiring Verizon SA, which in turn wholly owned Verizon Namibia last year.
According to Johnny Aucamp, general manager of strategic relations and business development, Africa at MTN Business, Namibia is a viable market as there is a considerable demand by organizations for superior service offerings and a competent telecommunications partner.
