Egypt's Mobinil May Sell $175 Million of Bonds to Fund Expansion, CEO Says

The Egyptian Co. for Mobile Services, the country’s biggest cellular phone operator by users, may issue bonds valued at 1 billion Egyptian pounds ($175 million), Chief Executive Officer Hassan Kabbani said today.

The Cairo-based company that operates under the brand Mobinil plans to use the proceeds to fund network expansion, Kabbani said in a telephone interview. He didn’t set a timeframe for the sale.

Mobinil sold 1.5 billion pounds of bonds this year with the institutional tranche having 1.5 times more offers than bonds available, and the sale to individual investors being 11.4 times oversubscribed.

“The first issue was a huge success,” Kabbani said. “We got a positive reaction and that’s why we’re thinking of a second issue to fund expansion. Mobinil has a very aggressive expansion plan.”

The company has difficulties borrowing from banks because the central bank limits how much a local company can raise from lenders and treats Mobinil as a unit of Orascom Telecom Holding SAE when it should be considered part of France Telecom SA, Kabbani said.

Orascom is the second-largest single shareholder of Mobinil after France Telecom, with a 34.6 percent stake. France Telecom owns 71 percent of Mobinil Telecom, a holding company that controls 51 percent of Egyptian Co., according to Bloomberg data. Orascom and the Paris-based company in May settled a more than two-year legal dispute over the ownership of Mobinil, keeping the ownership structure unchanged.

Shares of Mobinil rose 1.9 percent to 183.64 Egyptian pounds at the 1:30 p.m. close in Cairo today, valuing the company at 18.4 billion pounds.

To contact the reporter on this story: Alaa Shahine in Cairo at asalha@bloomberg.net

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