I blogged about what a loser this company seemed to be way back in 2007 here when the deal was done. I suspect it's no co-incidence that then CEO of Omantel, Mohammed bin Ali Al-Wahaibi, was subsequently replaced by the Government, after he resigned "for personal reasons". The current CEO is a smart young technocrat Dr. Amer bin Awadh Al-Rawas.
Now Omantel are looking for shareholder approval at yet another extraordinary general meeting to effectively loan the apparently useless company a whopping US$70 million: see the story in Reuters. The company was not able to borrow money on its own, never a good sign.
Remember the public company paid a whopping 25PKR per share for the majority stake - strangely enough, to a well connected Omani Businessman, one Sheikh Sulieman Ahmad Said Al-Hoqani, who must be credited with making a very, very cunning sale for close to $200 million - shares of which are now trading at around 2.5PKR per share, about a 95% loss for Omantel shareholders taking exchange rates into account. (Omantel threw more money at the useless company in 2009 too).
As the report read:
Omantel seeking shareholder approval for Worldcall
DUBAI | Wed Nov 10, 2010 3:07am EST
Nov 10 (Reuters) - Oman Telecommunications Co. OTL.OM (Omantel) will seek shareholder approval to serve as a guarantor to obtain funding for struggling Pakistani unit Worldcall (WCTL.KA), the company said on Wednesday.
Worldcall has requested $70 million in funding for capital expenditure and meet liabilities but was unable to independently obtain the required financing, Omantel said in a statement.
Omantel's board of directors will raise the issue of stepping in as a guarantor to obtain the financing at a planned extraordinary general meeting.
Omantel took a 56.8 percent stake in Pakistani diversified telecom operator Worldcall in 2008 as part of its strategy for international expansion. The $193 million deal marks its biggest foreign investment so far.
But the subsidiary came under pressure due to the global financial crisis and price wars that weighed on margins.
In 2009, Omantel sought to inject $50 million into the struggling unit.
Last week, Omantel reported third-quarter profit declined 33 percent, falling short of analysts' estimates, as expenses rose. (Reporting by Shaheen Pasha; Editing by Amran Abocar)
As far as I'm aware, no-one has questioned the board on this strange acquisition or the inflated price paid for it, nor the arrangements of the financing of the cash they've subsequently poured in. And I guess as long as Omantel can continue to exert pseudo-monopoly power over telecoms charges in Oman, the shareholders seem willing to stay for the ride, subsidised by the everyday people and businesses of Oman.
Sheikh Sulieman Ahmad Said Al-Hoqani was also on the Board of Directors for Oman Air, BTW, until he was replaced in 2007.
Photo: Omani businessman Sheikh Sulieman Ahmad Said Al-Hoqani, circa 2004.
Interested readers may wish to see for themselves the intricate network of companies associated with Sh. Al Hoqani and his associates via here, but be warned, it's a bit of a rabbit hole.
Omantel does seem to have an awful lot of extraordinary general meetings...
I wonder if anyone has looked into who WorldCall owes all that debt to?