Orascom Telecom Acquires Minority Stake

Orascom Telecom Acquires Minority Stake

Cairo:¬†Orascom Telecom Holding S.A.E. (“OTH”) has signed an agreement to purchase a 7.91% stake in its Algerian GSM operation, Orascom Telecom Algeria (“OTA”), for cash consideration of US$ 399 million from Emirates International Investment Company (“EIIC”).

Pro forma for this transaction, Orascom Telecom will directly and indirectly own 95.6% of OTA. The purchase agreement replaces the put and call option agreement that existed between OTH and EIIC, for which OTH had previously recognized a liability of US$ 290 million as of June 2006. The increased price notably reflects the increase in OTH’s share price and the strong performance of OTA since then.

Orascom Telecom consideration will be funded by internal cashflow and by drawing from its US$ 2.5 billion corporate facility put in place in early 2006. OTA is the leading telecommunications operator in Algeria in terms of subscribers, revenue, and network coverage and served over nine million subscribers as at June 30th 2006 representing 65% share of mobile market subscribers.

Orascom Telecom entered the Algerian market after winning the second GSM license in July 2001. OTA launched its network and commenced commercial operations on the 15th of February 2002. OTA provides a range of prepaid and postpaid voice, data and multimedia telecommunications services. In 2005, through a series of transactions, OTH acquired additional equity stakes in OTA which raised its shareholding to the current level of 87.7% from 58.4%. OTA accounted for 35% of OTH’s consolidated revenues and 49% of OTH’s consolidated EBITDA in the first half of 2006.

OTA has established a clear leadership position by covering over 90% of the population, spreading its coverage over all 48 Wilayas (provinces) in the country and providing on-road coverage along major national highways. OTA’s growth is also sustained by an aggressive network rollout which reached over 3,800 base stations. OTA has invested considerably in its network, and has rolled out a range of value added services based on GPRS and EDGE technologies.

Naguib Sawiris commented, “This transaction is a continuation of our strategy to consolidate our ownership in our strongest markets by buying out the minority shareholders, to increase growth, profitability and shareholders value.”

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About Orascom Telecom Holding:

Orascom Telecom Holding S.A.E. (“Orascom Telecom” or “OTH”) is a leading international telecommunications company operating GSM networks in seven high growth markets in the Middle East, Africa and South Asia, having a total population under license of approximately 460 million with an average mobile telephony penetration of approximately 19% as at 30 June 2006. Orascom Telecom operates GSM networks in Algeria (“OTA”), Pakistan (“Mobilink”), Egypt (“Mobinil”), Tunisia (“Tunisiana”), Iraq (“Iraqna”), Bangladesh (“Banglalink”), and Zimbabwe (“Telecel Zimbabwe”).

Orascom Telecom had over 40 million subscribers as at 30 June 2006. Orascom Telecom owns 19.3% of Hutchison Telecommunications International Limited, a leading telecommunication services provider operating in eight countries.

Orascom Telecom is traded on the Cairo & Alexandria Stock Exchange under the symbol (ORTE.CA, ORAT EY), and on the London Stock Exchange its GDR is traded under the symbol (ORTEq.L, OTLD LI)

 

By | 2017-06-20T10:41:36+00:00 October 27th, 2006|Uncategorized|0 Comments

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