Vodafone in deal to release $381m in deferred dividends

31/03/2016 07:23 AST

Telecom Egypt, the state-owned landline monopoly, said it had struck a deal with Vodafone Egypt under which the mobile operator would release at least E£3.34 billion ($381 million) in withheld dividends.

Telecom Egypt owns 45 per cent of Vodafone Egypt, which had been withholding dividends since 2012 because of difficulties repatriating profits.

In a statement on the stock exchange website on Wednesday, Telecom Egypt said a shareholders' meeting had agreed to settle the dispute, with Vodafone Egypt to pay no less than E£3.34 billion in cash dividends.

Telecom Egypt is entitled to 1.5 billion of those payments and the dividends would be paid in two equal instalments in April and June, the statement said.

A source at the ministry of telecommunications told Reuters Vodafone Egypt, majority owned by UK-based Vodafone Group , was expected to pay £4.5 billion ($503 million) in total.

Egypt's stock exchange briefly suspended trading of Telecom Egypt shares on Wednesday, after the government replaced all its representatives on the company's board of directors.

The government's new representatives are Tamer Gadallah, Maged Othman, Mohamed Shamroukh, Ashraf Halim, Lobna Helal, Ahmed al-Beheiry and Hussien Gamal Al Deenas.

Telecom Egypt said in 2013 it was also owed 8.8 billion Egyptian pounds in interconnection rates by mobile phone providers. Telecom Egypt charges interconnection fees to mobile providers when their customers call fixed-line numbers and vice versa.-

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