|Bankers urge amicable settlement with LibanCell
|'Time Is not in lebanon's favor'
The Lebanese government has no choice but to reach an amicable settlement with former mobile operator LibanCell as soon as possible because time is not in Lebanon's favor, a telecom expert said.
"The government is in no position to drag this case any longer because it will affect its credibility," the expert told The Daily Star on condition of anonymity.
Premier Fouad Siniora's government refused to pay LibanCell more money than FTML, which also operated one of the networks three years ago.
International arbitrators ordered the Lebanese government to pay each of FTML and LibanCell $266 million for revoking the BOT contracts prematurely.
FTML agreed to drop the charges in return of a $99 million settlement to be paid over the next three years.
However, LibanCell insisted on a previous agreement with former Telecommunication Minister Alan Tabourian which stipulates that the state will pay the company $153 million.
LibanCell, which is owned by Nizar Dalloul who is the brother in law of late former Prime Minister Rafik Hariri, asked U.S. courts to freeze the assets of the Lebanese government abroad.
To avoid any action in London or Luxembourg, the Finance Ministry cancelled plans to issue $850 million worth of cash Eurobonds this month.
The Eurobonds are aimed to swap maturing bonds that finance Lebanon's $38.6 billion public debt.
Although bankers ruled out any negative effect from this step, many urged the government to reach a settlement with LibanCell because the government needs to tap international markets for fresh Eurobonds.
Dalloul told an Arabic daily newspaper that LibanCell is armed with an international decision and the government has no choice but to comply.
He added that Telecommunication Minister Marwan Hamdade did not have any direct talks with his company in order to reach a settlement.
Sources said LibanCell wants to pay back the $120 million loan which it obtained from Banque de la Medditerranee, owned by Hariri's family.
The sources added Dalloul hopes to receive $153 million to pay off the bank loan and will not settle for anything less.
"The best way to solve this standoff is for Saad Hariri to step in and find an acceptable settlement between the government and LibanCell," a source said.
The Daily Star