Orascom Telecom’s Syrian assets frozen under court order
A Syrian court has ordered a freeze on the local assets of Egypt’s Orascom Telecom (OT) holding company. The verdict was issued in a dispute over a $49 million payment due to Syriatel, one of the two mobile licensees in Syria in which OT has a 25 percent stake.
On April 6, 2002, Syria’s Drayah Civil Court appointed two official receivers to manage Syriatel. OT then appealed against the ruling and announced that it was involved in a management dispute with Syriatel.
An OT statement attributed the litigation to "persistent attempts by the local Syrian partner to assume management control of Syriatel instead of Orascom Telecom with a particular motive to be able to sign solely on all bank accounts without any legal right, and in violation to the signed agreements between the two parties and the Syrian Telecommunications Establishment."
In early 2001, the Syrian government awarded a 15-year build, operate and transfer (BOT) GSM license to Syriatel, a joint venture 25 percent owned by OT and 75 percent held by various Syrian investors. A second GSM network Spacetel is operated by Investcom, a Lebanese-Syrian joint venture.
Under the terms of the contract, OT was required to pay $20 million in frequency fees for the GSM 900 MHz network, and an additional $15 million for the GSM 1800 MHz frequency bands. The contract also included a revenue sharing agreement, under which OT is to transfer 30 percent of the revenues of the first three years, 40 percent of revenues generated of the second three years and 50 percent of the revenues of the remaining contract period.
OT posted a 435.32 million Egyptian pounds ($94 million) net loss for the financial year 2001. In March 2002 Orascom Telecom was awarded the GSM license in Tunisia. With twenty-one licenses, telecom and Internet services operator conglomerate OT is the largest GSM (Global System for Mobile Communications) network operator in the emerging markets of the Middle East, Africa, and Indian sub-continent. — (menareport.com)
© 2002 Mena Report (www.menareport.com)