Shareholders will see dividends, says Orascom (Photo: Reuters)
Egypt's Orascom Telecom Media Technology (OTMT) says it would give shareholders much of the $1 billion it stands to gain by selling its stake in Mobinil and keep part of it for new business opportunities.
OTMT said earlier that it had reached a preliminary accord to sell most of its stake in the Egyptian telecom operator to fellow Mobinil shareholder France Telecom.
OTMT would retain a 5 per cent stake in Mobinil and continue to manage the company under a contract with the French telecoms group, OTMT's chief executive Khaled Bichara said.
OTMT would discuss the dividend with shareholders in the two months expected for the France Telecom deal to close, Bichara said.
"We expect a big portion of that will be given out to our shareholders as dividends, and we will keep the money we need for specific business development opportunities, which are not very clear for now," he told reporters on a conference call.
Under the terms of the accord, France Telecom will buy the stake held by OTMT for LE202.5 ($33.55) per share, netting the Egyptian company about LE6 billion.
France Telecom will then make an offer at the same price to the minority shareholders of the listed portion of Mobinil, known as ECMS, in a transaction worth up to LE5.87 billion.
Bichara said OTMT would continue to manage Mobinil and would retain the same number of board seats as well as 30 per cent of voting rights on Mobinil's board.
He pointed out that even after the sale, Mobinil would still have more Egyptian representation than the country's two other local telecom operators, owned by Vodafone and Abu Dhabi-based Etisalat.
Bichara said OTMT would be looking for business opportunities in neighbouring Arab countries.
"With the changes that have happened in the region, there are many countries that may do management contracts – Syria, once the situation calms down, Libya, Yemen," he said.
"If you look at Libya, the government owns the two operators. So, for example, maybe they will decide to do like Lebanon, where the government owns the two operators but gives management contracts to two separate management companies."
OTMT was formed from assets still controlled by Egyptian businessman Naguib Sawiris after he sold his stake in Orascom Telecom last year. It has investments in Egypt, North Korea, Pakistan, Lebanon and other North African and Middle Eastern countries, in mobile companies, media and technology and cable businesses.
The number of subscribers at its North Korean mobile operator just passed 1 million, and OTMT recently renewed its mobile management licence in Lebanon, Bichara said.
OTMT's share price jumped by 9.9 per cent on Monday, just short of the maximum daily 10 percent allowed under Egyptian stock market rules.