Rights issue will give flexibility during tax dispute with Algeria
Orascom Telecom, an Egyptian mobile phone operator, has won shareholder approval for a £E4.4bn ($800m) rights issue to bolster its balance sheet while it attempts to resolve a dispute with the Algerian authorities over a $600m tax claim.
The telecoms company will launch the rights issue in January 2010, with a formal announcement in the Egyptian newspapers. Existing shareholders will then have 30 days to decide whether to maintain their holdings in the company or to allow their stakes to dilute.
Orascom has said it wants to finish the initial subscription period by the end of February. If it fails to raise all $800m in the first round, Orascom will offer the outstanding shares to its existing shareholders irrespective of the size of their stake in the company.
When Orascom first announced its plans for a rights issue on 13 December, Weather Investments, which has a 50.6 per cent controlling stake in the company, said that it would maintain its holding and may even expand it.
Orascom’s chairman Naguib Sawiris owns Weather.