Incumbent Oman Telecommunications said, in a statement to the Muscat Securities Market, that it was looking to raise US$70m for struggling Pakistani unit Worldcall (WTL).
“WTL has now put forward a request for funding of US$70m to fulfil its capital…
Incumbent Oman Telecommunications said, in a statement to the Muscat Securities Market, that it was looking to raise US$70m for struggling Pakistani unit Worldcall (WTL).
“WTL has now put forward a request for funding of US$70m to fulfil its capital expenditure requirements (US$27m) and to refinance its existing liabilities (US$43m). Due to its current financial position and adverse financial market conditions, WTL is not able to independently source the required financing and has requested that Omantel, being the majority shareholder, support its funding requirements,” the statement read.
In 2008, Omantel acquired a majority stake (56.8%) in WorldCall for about OR72m (US$187m), as part of its international expansion strategy.
The statement also said: “Subsequent to the acquisition, WTL has had to face significant challenges that had an impact on its growth and profits. These challenges included price wars with a dominant competitor that impacted margins, a global financial crisis that impacted borrowing costs and adversely affected the PKR/US$ exchange rates and an uncertain political climate.”
On Monday, Omantel posted an OR84m (US$218m) net profit for the third quarter of fiscal 2010, a 3.9% increase on Q3 2009.