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UPDATE 1-Orascom Telecom to sell subsidiary for $180 million

Thu Nov 20, 2008 6:26am EST

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(Adds details of OrasInvest's activities, explanation for sale)

CAIRO, Nov 20 (Reuters) - Egypt-based mobile operator Orascom Telecom (OT) (ORTE.CA) (ORTEq.L) said on Thursday it had agreed to sell its service company OrasInvest to Abu Dhabi Investment for $180 million.

Abu Dhabi Investment will pay $90 million in cash this month and the remaining $90 million in the form of interest-bearing promissory notes due 12 months after the completion of the transaction, it said in a statement. Abu Dhabi Investment is a sovereign wealth fund owned by the government of Abu Dhabi.

OrasInvest builds and maintains mobile phone transmission towers and switches and runs packaging, delivery and collection services for Orascom Telecom, it added.

Orascom will continue to use OrasInvest's services through a service agreement that is part of the deal, which is the first step in a plan to outsource activities which are not central to OT's GSM mobile operations, it said.

"The sale of OrasInvest, which was decided in early 2008, will also result in a significant profit for the company and in significant value creation for our shareholders," the statement added, quoting OT chairman Naguib Sawiris.

OT shares were trading at 22.09 pounds ($3.99) at 11.13 a.m. (0913 GMT), about 6 percent down. The benchmark CASE 30 index was about 4.6 percent lower. ($1 = 5.534 Egyptian pounds) (Writing by Jonathan Wright; Editing by Mike Nesbit)



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