Orange may get option to increase Egypt stake

Orange parent France Telecom may get the opportunity to strengthen its shareholding in Egyptian mobile operator Mobinil if co-owner Orascom does not complete the spin-off of its shareholding by year-end.

The Orascom demerger forms part of the Egypt-based firm’s merger with VimpelCom and if it is not completed by year-end then VimpelCom gains an option to buy all of Orascom's assets, including its holding in Mobinil. However, Orascom told Zawya Dow Jones this week that if this situation occurs, then it would also trigger an option for France Telecom to have first refusal on the Orascom stake.

"If the internal restructuring [Orascom stock spin-off] does not happen and if there's an event of a change of control [the ownership of Mobinil], then France Telecom has the right to exercise its call option," the firm said.

If France Telecom were to take this opportunity it would strengthen its effective ownership in Mobinil from 51 percent to 71 percent.

The operator has a complex ownership structure. It is owned by a holding firm known as ECMS - which is in turn 29 percent listed on the stock exchange, 20 percent owned by Orascom and 51 percent owned by another holding company, also called (confusingly) Mobinil. France Telecom now owns 100 percent of this holding company following an earlier ownership dispute with Orascom.

According to the Latest Wireless Intelligence data, Mobinil is Egypt’s second-largest mobile operator on 30.1 million connections in Q3, behind market-leader Vodafone (35.8 million).