Orascom has revealed that it has essentially lost control of its North Korean operation, Koryolink.
The Egyptian operator rolled out North Korea’s sole mobile network in 2008 as a joint venture with the state-owned Korea Post and Telecommunications Corporation (KPTC). Orascom owns 75% of Koryolink, which has 3 million subscribers. The Korean operator posted a profit of $270 million before tax and depreciation in 2014, and is valued at around $832 million.
However, Koryolink has been a source of problems for Orascom – the Egyptian operator had a hard time repatriating profits in 2014 due to international sanctions as well as domestic currency restrictions. In a November stock market filing, Orascom has now revealed that it has written off the unit.
Orascom CEO Naguib Sawiris has confirmed that the operator is “trying to negotiate a solution”, which could consist of a merger with state-owned carrier Byol. However, the resulting entity would not be controlled by Orascom, meaning that the Egyptian firm has already effectively ceded control of Koryolink.
