Sawiris rebuffs claims of Orascom stake sale

Orascom Telecom’s chairman Naguib Sawiris has denied the Egyptian company is involved in selling a majority shareholding.

"We are not in any talks to sell a stake," Sawiris stated in response to a report from the UAE’s The National. The newspaper quoted him as saying he preparing to cede control of Orascom Telecom (OT), with the firm assessing possible buyers of a majority stake or partner in a merger.

"People like me need to start thinking, ‘I cannot keep controlling my company, I need to cede control in exchange for shared control’," Sawiris was cited in The National. "But I don’t want to be an insignificant shareholder."

However, it is unlikely that the firm would be involved in a stake sale, with the firm still engrossed in a dispute with the Algerian government over a backdated US$600 million tax bill for the fiscal years 2004 to 2007. On March 7, Algerian tax authorities rejected an appeal from OT filed in December for a tax reassessment. OT intends to file an appeal before the Central Commission, which under Algerian law requires payment of 20 per cent of the balance of taxes and penalties alleged to be owing, equating to around US$110 million.

Additionally, OT has been engaged in legal action in Egypt to block France Telecom from taking full control of their joint venture Mobinil.

Sawiris founded the operator in 1998, which has grown to 89 million subscribers as of September 30, 2009. OT operates GSM networks in Algeria, Pakistan, Egypt, Tunisia, Bangladesh and North Korea. Through its subsidiary Telecel Globe it operates in Burundi, Central African Republic, Namibia and Zimbabwe. The Egyptian firm also has an indirect equity in Globalive Wireless (Wind Canada).