Orascom Telecom announces the sale of its Iraqi mobile operator Iraqna to Zain

December 3, 2007

2 Min Read

CAIRO, Egypt -- Orascom Telecom Holding S.A.E. (“OrascomTelecom”) announced today that it has concluded a definitive agreement for thesale of 100% of the share capital of Iraqna Company for Mobile Phone ServicesLtd. ("Iraqna") to MTC-Atheer, the Iraqi subsidiary of Mobile TelecommunicationsCompany K.S.C. ("Zain"), for a consideration of US$ 1.2 billion (the“Transaction").

MTC-Atheer will pay 50% of the consideration on the first anniversary ofcompletion of the Transaction and after six months of the completion of theTransaction, will deliver a promissory note for the remaining 50% due on thesecond anniversary. The payments are fully guaranteed by Zain. Completion ofthe transaction is expected before the end of the year.Orascom Telecom had previously announced a Joint Venture Agreement (''JVA")with Korek Telecom on September 3rd, 2007. Orascom Telecom and KorekTelecom have not been able to reach a satisfactory agreement prior to theinterim license expiry date of November 30th, 2007, and the JVA has elapsedaccording to its terms.

Orascom Telecom was first awarded the license to build and operate centralIraq’s first commercial mobile telecommunications network in December 2003.Roughly a year later, Iraqna’s license became a nationwide license and thecompany has since expanded its network to offer services throughout Iraq,investing over US$ 360 million in its GSM mobile network and serving over 2.8million active subscribers as at June 30th, 2007.

Mr. Naguib Sawiris, Chairman and CEO of Orascom Telecom, stated: "We havebuilt a very successful and profitable operation in Iraq despite a very difficultoperating environment. Following the auction for the long term license, thepotential returns of Iraqna did not satisfy our targeted return on equity for theassociated high risk of the operation, which would have entailed a furtherinvestment of US$ 1.25 billion for the license payment. With this Transaction weare achieving an excellent return on equity and further demonstrate OrascomTelecom’s focus on enhancing shareholders’ value even in difficult markets.

Orascom Telecom will continue to lead the growth and development of mobilemarkets in Algeria, Egypt, Pakistan, Tunisia and Bangladesh; opportunisticallyseek strategic investment opportunities in emerging markets; and continue withits buyback program.”

Orascom Telecom

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