Sunday, March 8, 2009

Egypt’s Orascom Telecom may sell IT subsidiaries

Orascom Telecom, the largest Arab telecom firm by subscribers, said on Sunday it was studying an offer for two of its information technology subsidiaries, to increase focus on its core mobile business.

Orascom said it may sell LINKdotNet and Link Egypt to Mobinil, Egypt’s largest mobile operator by subscribers, in which it owns an approximately 35 percent stake.

“The sale...represents another key step in the implementation of our stated strategy to dispose of our non-core assets and focus on our GSM business,” Orascom Telecom Chairman Naguib Sawiris said in a statement.

Orascom did not say how much Mobinil had offered to pay for the two companies. LINKdotNET sells Internet services in the Middle East region and Link Egypt sells offshore software development services, according to its website.

The sale would allow Orascom, whose shares have lost more than a third of their value this year, to raise cash, said Shrouk Diab, telecom analyst at Cairo-based investment bank Beltone Financial.“They are trying to cut capex (capital expenditure) across the board ... in response to global economic conditions,” she said.

Buying the two companies would allow Mobinil to boost its data offering to better compete with the Egyptian subsidiary of United Arab Emirates-based Etisalat ETEL.AD, she said.

“It is part of them trying to integrate and consolidate more strength in terms of the data segments of their revenue,” she said.

In November, Orascom said it had agreed the sale of service firm OrasInvest to sovereign wealth fund Abu Dhabi Investment for $180 million.

(Source: Reuters)