EFG Hermes issued a report on Orascom Telecom Media and Technology (OTMT) stating that the company will hold an AGM on June 28, 2012 to approve financials for the period ending on 7 June, and look into EGP5,508 million dividend(EGP1.05/share cash dividend).

According to Egypt-based investment bank, “OTMT has received EGP6.0 billion in proceeds from the sale of its stake in Mobinil to France Telecom (FT), while keeping a 5% economic stake (28.75% voting rights) and continuing to receive management fees from the operation (0.75% of Mobinil’s total revenue)”.

Hermes stated; “Our new Fair Value (FV) pre-dividend distribution is USD1.56/EGP1.90 per share. We reach this FV though an SOTP valuation of: i) Remaining 5% stake in Mobinil, which we value at present value of the exercise price floor of FT’s Call Option on the stake (EGP243.5/share exercisable during January-February of 2013), and using a 20% discount rate (EGP1.1 billion); ii) OTMT’s 75% stake in Koryolink, valued using the DCF method at USD444 million for 100% of the operation. Our implied EV/EBITDA2012 is a very conservative 3.0x, given the various political and financial risks inherent in investing in North Korea (EGP2.0 billion); iii) Present value of management fees that OTMT receives from Mobinil (EGP812 million); and iv) Cash balance from proceeds of Mobinil sale (EGP6.0 billion). We are not assuming any capital gains taxes on the Indirect stake that OTMT held in ECMS through the Mobinil Consortium which could be, according to our estimates, a maximum of cEGP450 million. We note that the issue is still under discussion and the final outcome could be significantly lower”.