Orascom offloads sub-Saharan assets

Egypt-based GSM operator Orascom has pressed on with its financial clear-out with the sale of several assets owned by its troubled sub-Saharan subsidiary Telecel.

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By  Richard Agnew Published  May 7, 2003

Egypt-based GSM operator Orascom has pressed on with its financial clear-out with the sale of several assets owned by its troubled sub-Saharan subsidiary Telecel.

The move has seen five Telecel divisions - in Gabon, Benin, Niger, Togo and Burkina Faso - jettisoned in return for US$23.1million in cash from Atlantique Telecom, a subsidiary of Banque Atlantique of the Ivory Coast.

Units in Zambia, Uganda, Burundi, Central African Republic and South Africa have also been offloaded to the Gloria Trust, a minority shareholder in Orascom. In return, the Gloria Trust will hand over its 26.5% stake in Telecel, forgive US$27m owed to it and 7.5m global depository receipts in Orascom.

In a statement, Orascom said the deals would allow it to “retain the majority of Telecel’s value with self sustaining assets while at the same time shedding debt and ongoing financial obligations, consistent with Orascom’s overall restructuring strategy”.

The operator had been under pressure to offload its majority stake in Telecel, which cost it US$413million only three years ago but was subsequently hit by political instability in the countries in which it operates.

However, Orascom will be left with full ownership over Telecel and its remaining assets; majority stakes in Loteny Telecom of the Ivory Coast and Telecel Zimbabwe, as well as 100% holdings in X-Com in the Democratic Republic of Congo and M-Link, an international carrier based in Belgium. Telecel’s headquarters will also be transferred to Cairo as part of the restructuring.

The deals mark another step in Orascom’s strategy-shift from rapid expansion to scaling back operations, cutting debt and generating long-term profits in what it calls its four key markets; Algeria, Egypt, Pakistan and Tunisia.

In January, the operator sold its stake in Jordan-based mobile operator Fastlink to Kuwaiti firm MTC for US$424m, enabling it to repay US$187m in debt to equipment suppliers Alcatel and Siemens.

The deal with Atlantique Telecom has also allowed Orascom to reduce its debt by an additional US$81million, and Orascom said it has reached an agreement with Siemens to restructure the debt the German company holds in Telecel subsidiaries.

The deals for Telecel Togo and Telecel Burkina Faso remain subject to third party consent.

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