Lebanese cellular firms refuse to endorse ownership transfer deal
Lebanon’s cellular operators Cellis and LibanCell refused Tuesday, December 9, to endorse the transfer of ownership agreement handed to them by Telecommunications Minister Jean-Louis Qordahi. The firms demand further amendments, particularly to the arbitration clause. Qordahi stated that the contract’s text was final and instructed the ministry’s lawyers to take legal action if the companies decline to sign, reported the Daily Star.
The Lebanese cabinet decided on November 28 to suspend its $600 million claim against the firms for alleged contractual violations and submit the dispute to international arbitration. The contracts of the current operators were revoked in mid-2001, although their 10-year Build-Operate-Transfer (BOT) contracts were to expire only in 2004.
The government claimed the original contracts had a limit of 250,000 subscribers per operator, and accused the firms of operating a total of 800,000 lines. The companies were thus presented with the demand to pay $300 million each to increase their subscriber limit.
Part of the latest settlement effort, the government offered the firms $178 million in compensation for the early termination of their contracts. The companies were in turn expected to put their signatures to the transfer agreement.
The cash-strapped Lebanese government decided in July to put the country’s two cellular networks up for sale, through an international public tender. The new 20-year operating licenses are to be offered as soon as current operators sign the transfer agreement.
The cellular companies offered the government $1.35 billion each to convert their existing contracts into formal 20-year licenses, but were turned down. Both companies may still submit biddings for the new GSM licenses.
Cellis, 65 percent owned by France Telecom's, and LibanCell, 14 percent owned by Finland’s Sonera, were accused by the government of having passed the limit of 250,000 clients set by their contracts. — (menareport.com)
© 2002 Mena Report (www.menareport.com)