Friday, December 10, 2010

Asian Beach games a success; Omantel to formally ask shareholders for more cash to WorldCall this week

Asian Beach Games
Well, The Asian beach games in Mussanah got off to a good start, albeit at a cost of over $100 million and using about 50% of all available hotel accommodation in the country to house the atheletes (as mentioned by Muscat Mutterings.)

Photo: Its been a week of fireworks all round in Oman.

There may not be the sort of cheerleaders they had in Bali (see here), but so far the event seems to have gone without major incident. Oman’s Ali Saleh Al Balushi even got the first Gold medal for Oman in the "tent pegging" competition. I'm glad they put the word 'tent' in there.

Omantel Looks to invest more money in Pakistan Cricket
In other news, those of you who are shareholders in Omantel may wish to head out to HQ in Muwalah this Wednesday to see what the deal is with Omantels request to flush invest another US$36 million at their Pakistani company WorldCall.

Some obvious questions:
- why is WorldCall unable to obtain financing without this guarantee by OmanTel?
- WorldCall was reported as requesting some $70 million in support. Are other WorldCall shareholders also guaranteeing the loan requirements?
- what's the current book value of OmanTel's shareholding in WorldCall compared with the purchase price? How is this consistent with the purchase price (Omantel paid 25 PKR/share) vs the current traded price of 3PKR/share?
- does the current book value already assume commitment of this additional loan support from OmanTel?
- with WorldCall currently making an operating loss for the second year running, how does Omantel justify using significantly positive forward growth assumptions in WorldCall's 5 year revenue and profit forecasts for the IFRS impairment test?
- what is the relationship between WorldCall and First Capital Securities Corporation Limited and their subsidiaries (such as Pace Pakistan Ltd)?
- is it appropriate that while making operational losses Worldcall is a major sponsor of the Pakistan Cricket Board? (yes, they really are)

If anyone attends, I'd appreciate a note on how the meeting goes...

Here's the official invite to the EGM:
Oman Telecommunications Company SAOG Invitation to attend the Extra Ordinary General Meeting on 15th December 2010 at 4:30 pm.

The Board of Directors of Oman Telecommunications Company SAOG have the pleasure at inviting the honorable shareholders to attend the Extra Ordinary General Meeting to be held on Wednesday, 15th December 2010 at 4:30pm at the company's Head Quarter In Muwalah to discuss the following agenda: To study the proposal to finance the company's subsidiary, Worldcall Telecom Limited Company and authorize, the Board of Directors to issue a written guarantee to a third party for providing funding equivalent to USD 36 Million to World call.

Shareholder may give a written proxy to another person to attend the meeting and vote on his/her behalf Shareholders are requested to arrive at the meeting half an hour before the meeting.

For further information, please contact Mr. Faris Al-Ma'amari on phone No.24244579, Fax; 24240102.


  1. Omantel is only giving guarantee and is not putting in any further money at all. This does not involve paying of cash. Yes for the sake of argument it can be said that what if WTL defaults...? Yes in this case Omantel has to pay money. But why Worldcall should default? if such a strong regional operator is there who is sponsor of Worldcall.

    Independent consultant is hired which reports that 5 years business plan is successful. Who knew that crisis in world would be there ? No one knew that. Yes it has been unlucky that PK depreciated as compared to dollars but this was an unseen even by rest of the world too. What is happening in Ireland? Earlier in Greek? Were't they were someone's fish to fry ?

    So the best is to support Omantel in their business plans. Why to risk who USD 185m invested earlier then the sake of something which at the moment right now doesn't even involves cash payment.

  2. Beach games sound like fun, but I have heard of mass chaos as volunteer and media registrations still being conducted the day of the opening ceremony.

    Still, good chance for Oman to 'win' some 'medals' in the 'sports' they are participating in. (Although give them credit for the swimming, Sailing, Handball and Soccer)

    (Oh, and how did Oman 'win' a bronze medal, without winning a match in one event...ahem...back.....ahem...hander)


  3. Because you made a bad decision at first (or decision which doesn't make any business sense) you justifying sinking more money into the drain. That is the justification anon1 is putting. Was worldcall the only investment avenue available for Omantel?
    It is a given that worldcall will default and Omantel will payup although we don't know who will benefit from this.


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