CORA INVESTMENT DISPUTE NEAR RESOLUTION?

UNCLAS ABIDJAN 000819

SIPDIS

SENSITIVE
SIPDIS

STATE PASS TO USTR/OAA

E.O. 12958: N/A
TAGS: EINV ETRD PREL IV
SUBJECT: CORA INVESTMENT DISPUTE NEAR RESOLUTION?

REF: ABIDJAN 758


1. (SBU) Summary. A joint delegation of representatives of
Cora shareholders and the Ivoirian government expressed
strong optimism to the Ambassador July 26 that the Cora
dispute is very close to a final resolution. They will meet
with the Prime Minister about this July 27. The Ambassador
welcomed this news, but cautioned that the government is very
short of money and deeply preoccupied with the country's
political crisis. It is encouraging that Prime Minister
Banny is apparently giving this matter his personal attention
at this difficult moment for him politically. However, we
have been told before that this deal is almost done -- we
will believe it when we see it. End Summary.


2. (U) Representatives of the government of Cote d'Ivoire and
the Cora de Comstar shareholders briefed the Ambassador July
26 on the state of play on the Cora de Comstar business
dispute. Representing the government were Guy M'bengue, head
of APEX-CI (the Cote d'Ivoire Export Promotion Agency),and
Jared Genser, from Piper Rudnick Gray Carey, the law firm
representing the Ivoirian government in Washington on this
matter. Representing the shareholders was Babatunde Soyoye,
Managing Director from Helios Investment Partners, an advisor
to the Modern Africa Two Fund.


3. (SBU) M'bengue explained that there had been an internal
Ivoirian government meeting the previous day at which all
four agencies involved in this matter were represented: the
Ministry of Telecommunications, the Prime Minister's Office,
the Ministry of Finance, and the Ivoirian Telecommunications
Agency (ATCI). He said that it was confirmed at this meeting
that the government will expeditiously settle the Cora
dispute on the terms of the agreement in principle that was
reached in February 2006, according to which the government
is to give Cora shareholders either USD 6 million in cash or
an irrevocable letter of credit in that amount which would
come due on December 31, 2006 if the government is unable to
raise the USD 6 million from the sale of Cora's license by
then. It was also decided at that meeting that the same
interagency group would meet with Babatunde and Genser in the
afternoon of July 26, and the Prime Minister would meet with
them July 27. Genser noted that ATCI's revocation of Cora's
license (reftel) had been done without the knowledge of the
other agencies involved, and that ATCI had subsequently been
instructed to suspend the revocation. M'bengue and Genser
repeatedly stressed their optimism that this dispute is very
close to a final resolution, though they could not guarantee
that it would be resolved during Babatunde and Genser's
two-day visit. Genser pointed to his very presence on this
joint mission with Babatunde, at the Finance Minister's
request, as evidence of the sincerity of the government's
intentions.


4. (SBU) Babatunde expressed the same optimism, though he
noted that if a final resolution is not reached during his
visit, the shareholders will want a firm deadline to be
imposed, after which the shareholders will get their license
back if the matter remains unresolved. He noted that Helios
Investment Partners is a new USD 300 million investment fund,
with half of its capital coming from the United States, which
intends to invest 70 percent of its capital in West Africa.
He said the fund is extremely interested in investing in Cote
d'Ivoire, but cannot do so as long as the Cora dispute
remains unresolved. Genser noted that Piper Rudnick Gray
Cary has repeatedly advised the Ivoirian government to
resolve this dispute without delay, because it is the right
thing to do but also because this would be an important step
toward restoration of AGOA benefits and attracting more
American investment. However, he acknowledged that there are
a number of other benchmarks to be reached before AGOA can be
restored.


5. (SBU) The Ambassador said he was delighted to hear that
the Cora dispute might be close to resolution. However, he
cautioned that the Ivoirian government is currently very
short of money and deeply preoccupied with the country's
protracted political crisis. He assured Babatunde that we
would continue to follow this issue closely and to press the
government to put the matter behind it.


6. (SBU) Comment. In Cote d'Ivoire's fractured and
crisis-driven political environment, it is encouraging to
hear that four government agencies are apparently working
together in a business-like manner to resolve this investment
dispute. It is even more encouraging that Prime Minister
Banny is apparently giving this matter his personal attention
at this difficult moment for him politically. However, we
have been told before that this deal is almost done -- we
will believe it when we see it. End Comment.
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