Mobilink Parent Company Sells Tunisian Stake to Repay Debt

Mobilink Parent Company Sells Tunisian Stake to Repay Debt

Orascom (Mobilink’s parent company) has sold its Tunisian business to help repay the debt, according to Reuters, but its Pakistani subsidiary, Mobilink, is unconcerned about the deal. Qtel the Qatar-based company bought a stake in Orascom’s Tunisian operations. Interestingly this firm also owns Wi-Tribe, Pakistan’s second largest WiMAX broadband operator.

Orascom Telecom Holding has already sold its internet services arm LINKdotNET and Link Egypt to Qtel in July. Also there are reports that MTN Group, was preparing to buy Orascom’s operations in African countries of Egypt, Algeria, Zimbabwe and Tunisia. These selling’s have helped the company to repay its debt for sure however, analysts are unsure that to what extent this helped the company and whether or not Orascom will still need to sell more of its assets in order to pay the debt.

As far as Mobilink’s operations are concerned it is still up and running. Mobilink is Orascom’s most profitable subsidiary and also it is acting as a cash cow for the parent company in the sense that its fixed costs had been covered by its operations at this point. Industry analysts think that current deal will help the parent company to concentrate more on Mobilink’s operations in Pakistan. The company is the country’s largest mobile service provider and showed the largest gain in users in fiscal year 2010, according to the PTA’s annual report.

Observers also pointed out that earlier in May, Orascom had bought $140 million of Mobilink’s debt. A telecom analyst at EFG-Hermes, Marise Ananian, had said,

“We believe that buying back those debts is generally positive news for Orascom Telecom as the Pakistani subsidiary was already highly leveraged.”