Orange-owner France Telecom and Egypt’s Orascom have provided further details on their agreement struck last month to end their long-running dispute over ownership of ECMS, Egypt’s largest mobile operator. According to a Dow Jones Newswires report, the two operators released a joint statement over the weekend following a request from local regulators to explain the US$300 million settlement fee agreed by the two firms. The fee – payable by France Telecom to Orascom – takes “into account the value of the additional portion of EBITDA that will be consolidated by France Telecom in its financial statements” but would not impact minority shareholders, the firms said. The fee aims to compensate Orascom as it can no longer consolidate ECMS results under the amended deal.  On the management side, France Telecom will appoint a chief executive officer and chief financial officer at ECMS, while Orascom will select the chief technical officer and chief commercial officer.

ECMS is 51 percent owned by a holding company called Mobinil, which in turn is 71.25 percent owned by France Telecom and 28.75 percent owned by Orascom. The Egyptian firm also has a direct 20 percent stake in ECMS with the remaining 29 percent free float. This complicated ownership structure led to a dispute between France Telecom and Orascom that lasted several years prior to the new agreement being reached on 15 April last month. The agreement proposes a revised shareholder agreement rather than a change to the existing ownership structure. The previous deadlock resolution mechanism will be replaced with a right granted to Orascom in certain deadlock situations to put its shares in Mobinil and ECMS to France Telecom “for the Put Option Consideration,” the firms said yesterday.