Orascom Tel says to raise $2.4 bln

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CAIRO: Egypt’s Orascom Telecom said on Monday it was seeking to raise its capital to LE 14 billion ($2.35 billion) from LE 7.5 billion and that it planned to divide the company into two.

Orascom will call a general meeting on April 13 to approve the company split as well as the capital increase, which it said it would use to fund its debt, but did not give any further details.

Shareholders of Russian mobile operator Vimpelcom earlier this month approved a $6 billion-plus purchase of Wind Telecom, which owns OT, creating one of the world’s biggest mobile operators by number of subscribers.

OT said on Monday the Vimpelcom deal would improve its negotiating position with the Algerian government over the fate of its unit in the country.

The firm has been locked in a long-running dispute with Algeria over the unit, Djezzy, its biggest single source of revenue, and uncertainty over its future had complicated the Vimpelcom deal.

Algeria’s government, which said it will nationalize Djezzy, has hit the unit with hundreds of millions of dollars in back taxes and barred it from moving profits abroad.

It also blocked Orascom from selling the unit to South Africa’s MTN.

Consultants hired by Algeria to value Djezzy are scheduled to complete their work by the end of May.

Vimpelcom claimed victory in a long-running battle for Wind Telecom when the majority of shareholders voted for the deal that will see the Russian mobile phone group take on nearly $20 billion of debt and diversify into new markets.



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