Orascom wins waiver from major lenders
Cairo, December 25, 2009
Egypt's Orascom Telecom (OT) said it has obtained a month-long waiver from major lenders that will enable it to go ahead with a $800 million capital increase.
Pressed as to what the waiver - to run until January 26 - would entail, officials from the international phone operator declined to comment.
Chief executive officer Khaled Bichara said the waiver would not affect the firm's repayment schedule for its $2.5 billion of debt.
The company, which runs mobile phone operations from North Africa to North Korea, said it needed the waiver because of issues caused by a dispute with Algerian tax authorities.
OT, whose shares trade up 0.7 per cent, said it was seeking a longer-term solution from its majority senior secured lenders to address the Algerian tax claim.
'It's a systematic thing. Our plan is the same, we're going to do a capital increase,' Khaled Bichara said. 'Once the capital increase is done, you will not need the waiver anymore.'
It said it was seeking shareholder approval for an $800m rights issue, and would use the money to cover any cash shortfall as it tries to resolve its tax dispute with Algeria.
Orascom said its parent company Weather Investments had committed to 51pc of the capital increase and would cover any shortfall.