FT confirms move to raise stake in Mobinil

France Telecom has confirmed reports that it is in talks with Egypt’s Orascom Telecom Media and Technology Holding regarding their interests in the local mobile network operator, Mobinil.

France Telecom and Orascom Telecom have signed a non-binding memorandum of understanding regarding their interests in Mobinil and Egyptian Company for Mobile Services (ECMS).

The Egyptian mobile network is owned by a holding company – ECMS – which is in turn 29 per cent listed on the stock exchange, 20 per cent owned by Orascom Telecom and the remaining 51 per cent is owned by another holding company – Mobinil – which is wholly-owned by France Telecom

The intention is for the sale of most of Orascom Telecom’s stakes in Mobinil/ECMS at a price of EGP 202.5 (US$33.57) per ECMS share.

The closing price for the shares was EGP 125.36.

France Telecom would then launch an offer to buy all the shares left on the Cairo stock exchange at the same offer price.

Following such a deal, Orascom Telecom would retain a five per cent interest in ECMS, and also retain similar voting rights and board representation as it currently has.