Orascom Telecom: Proposed rights issue to raise US$800 million
Orascom Telecom Holding S.A.E. (“OTH” or the “Company”) announces that the Board of Directors was convened on 10 December 2009 and has decided to call for an extraordinary shareholders’ meeting (the “EGM”) to increase the Company’s authorized capital and to authorize a capital increase through a rights issue (the “Rights Issue”).
The proposed Rights Issue is intended to further strengthen the balance sheet and ensure OTH's liquidity including financing needs for the Group in the case where there is no immediate resolution of the tax dispute in Algeria. The size of the Rights Issue proposed to the EGM is up to EGP 5 Billion, which will allow the Company to issue a Rights Offering of US$800 Million or EGP 4,392 Million at the current EGP/US$ rate. The Rights Issue shall offer existing shareholders new shares for every existing share in the Company at a price of EGP 1 per share (equal to the nominal value of an ordinary share in the Company).
Weather Investments, OTH’s largest shareholder, which owns approximately 50.6% of the outstanding shares, has communicated to the Company its commitment to subscribe for a minimum of its existing pro rata share in the Rights Issue. The proposed Rights Issue is subject to shareholders’ approval at the EGM to be held on December 27, 2009. OTH has appointed Bank of America Merrill Lynch, BNP Paribas, Citigroup Global Markets Limited, Credit Suisse Securities (Europe) Limited and EFG-Hermes to advise on the Rights Issue.
Naguib Sawiris, Executive Chairman of OTH commenting on the transaction, said “We occupy a unique position as a leading operator of networks in the high growth markets of the Middle East, Asia and Africa. This transaction will enable the Company to strengthen its balance sheet to benefit fully as conditions improve across our core markets while we work towards the optimal resolution of the situation in Algeria. We have chosen to use a Rights Issue at par as per common practice on the Egyptian Capital Markets”.
Subject to the approval of the EGM, the date of the subscription period will start 15 days after the date of publishing a public subscription notice in the Egyptian newspapers. The initial subscription period will last for a minimum period of 30 days and will be open to all shareholders on a pro-rata basis. In the event that the Rights Issue is not subscribed to in full, a second round may be open where all shareholders who participated in the initial subscription period will have the option to subscribe to the remaining rights regardless of their pro-rated stake.