DUBAI, 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. [ID:nLC470835]
Last week, Omantel reported third-quarter profit declined 33 percent, falling short of analysts’ estimates, as expenses rose. [ID:nLDE699024] (Reporting by Shaheen Pasha; Editing by Amran Abocar)