Naguib Sawiris, the Egyptian billionaire whose $520 million bid to snap up the Allstream division of Manitoba Telecom Systems was turned down by Ottawa last week, regrets ever wanting to invest in Canada and said he will take his money elsewhere.
“The world is big and my money can go anywhere,” Sawiris, said in an interview with Ahram Online, one of Egypt’s largest news organizations. “I am finished with Canada, I tell you.”
Sawiris, considered to be the ninth richest person in Africa, is head of Orascom Telecom Holdings which was a major financier of Canadian wireless startup Wind Mobile.
Canada had recently relaxed its investment rules to allow foreign companies to buy all of a Canadian carrier with less than 10 per cent share of the market. Last May, Accelero Capital Holdings which was founded by Sawiris, offered $520 million for Allstream. MTS wanted to divest itself of Allstream in order to focus on providing wired and wireless services in its home province.
However, Shared Services Canada had signed last December a multi-year contract with MTS to provide IP and Ethernet services over Allstream’s network to almost all of the federal government. On October 7, Industry Minister James Moore announced the proposed acquisition “will not proceed.”
“MTS Allstream operates a national fibre optic network that provides critical telecommunications services to businesses and governments,” he said, “including the government of Canada.”
Sawiris said he was “extremely surprised and disappointed” by the Harper government’s decision. He said government officials did not provide him with any specific explanation for the rejection or signaled any objection to the deal in the 136 days since the transaction was announced.
“They change the laws for foreign investment, and then they block,” he said.
The country’s wireless incumbents “have enough muscle to prevent real competition,” according to Sawiris and his advice to foreign investors is “not to waste their time in investing in Canada.”
He told Ahram Online that the only reason he can think of for the rejection is that he is chairman of Orascom which has a 75 per cent stake in Koryolink, North Korea’s 3G cellular operator which launched in 2008.
“Maybe they though there was a link between North Korea and Egypt, and that Egypt is sending agents to spy on Canada…like a James Bond movie,” he said. “That’s their (Canadian government’s) level of sophistication.”
The telecom magnate, however said, he can invest the money originally intended for the Allstream purchase in Egypt where he is “very optimistic” about the political and economic situation.