CAIRO: Egypt-based Orascom Telecom said on Sunday it would seek shareholder approval to raise $800 million in a rights issue to strengthen its balance sheet.
Orascom said the funds would be used if it was not able to quickly resolve a dispute with Algerian tax authorities involving its Algerian unit, which operates a mobile network under the brand name Djezzy.
The proposed rights issue is intended to further strengthen the balance sheet and ensure (Orascom Telecom s) liquidity including financing needs for the group in the case where there is no immediate resolution of the tax dispute in Algeria, Orascom said in an e-mailed statement.
Last month Orascom announced that the Algerian tax authority had charged it $596.6 million in taxes on allegations that it had not kept proper accounts in 2005-2008.
Orascom said at the time the ruling was based on an unfounded and unacceptable allegation and that it would challenge the assessment.
Orascom said it would seek approval to raise up to LE 5 billion at a shareholders meeting on December 27. The firm said it expected the initial subscription period to expire before the end of February 2010.
It said it had appointed Bank of America Merrill Lynch, BNP Paribas, Citigroup Global Markets, Credit Suisse Securities (Europe) and Egypt s EFG-Hermes to act as advisers on the issue.
Weather Investments, which owns about 50.6 percent of Orascom Telecom shares, had agreed to subscribe to the rights issue in full, the statement said.
Orascom is also locked in a tussle with France Telecom over ownership of Egyptian mobile firm Mobinil. -Reuters
