In compliance with the Cairo Stock Exchange’s new regulations on ownership requirements, Egyptian mobile phone operator Mobinil is to sell a larger stake in the company to a local enterprise, the company reported to local media.
CEO Yves Gauthier said the company would “seek to raise Mobinil’s shares in Egypt to 15 percent.”
He said the company has three options in order to make this a reality – to find another strategic partner, go to the stock market or do both.
Gauthier said the most favorable option “is to go to the stock market,” adding that this “depends on the economic situation in the country, which is not very good or stable now.”
Gauthier said the company “is working on introducing new 4G infrastructure to Egypt, in addition to making other investments that would increase its costs.”
He estimated that the company will spend EGP 2 billion (approximately $297, 000, 000) on investments in 2013.
Egypt’s government has continued to push for greater local ownership, but with international loans being discussed, one with the International Monetary Fund (IMF), the government may not be able to force too much local ownership on companies if it wants to open the economic situation up for foreign investment.
In related news, Gauthier said that the rumored price hike, which was first enacted by mobile operator Vodafone, “was merely the company’s decision to pass the existing 15 percent sales tax on to consumers. Mobinil has not made a move to increase prices yet, but this is becoming an inevitability given the current economy.”
Gauthier added that if the IMF-mandated tax reforms put on hold by President Mohamed Morsi in December are put into action, “the company would have no choice but to pass the higher taxes on to its customers.”