The Egyptian government said earlier this month it was considering the divestiture of the 45% equity owned by landline operator Telecom Egypt (TE) in Vodafone Egypt to a sovereign entity.
The government is seeking to maintain its ownership in the mobile firm for national security reasons, especially as the two other mobile firms, Mobinil and Etisalat Misr, are majority owned by global companies.
The government is currently studying the proposal with the aim of reaching the best option for TE’s exit from Vodafone, given that TE is close to winning a license to provide mobile services.
There are fears that the country’s telecommunication sector may be dominated by foreign companies, as Mobinil is 94% owned by France Telecom and UAE’s Etisalat holds a 65% equity in its Egyptian arm.
Vodafone Egypt said on Sunday it was negotiating an EGP 4 billion ($560 million) credit line with a consortium of seven banks, according to Reuters.
The participating banks are Banque Misr, Commercial International Bank, Bank of Alexandria, HSBC, Barclays Bank, Emirates NBD and QNB Bank.
Vodafone Egypt, majority owned by British mobile operator Vodafone, is the leading communications player by customer numbers in the country of 86 million. It is also 45-percent owned by fixed-line telecoms firm Telecom Egypt.
The spokeswoman did not say how the cash would be used but Egyptian financial newspaper al-Borsa said it would go towards modernising the company's network and improving services in the face of regular power blackouts.