Egypt based Orascom Telecom Holding has announced that its Algerian subsidiary Orascom Telecom Algerie (OTA) has received the approval of the Algerian government's tax office to repatriate 50% of its 2008 dividends to its nonresident shareholders.
With this approval, OTA is entitled to transfer 50% of the 2008 dividends in the amount of approximately US$257 million to its non-resident shareholders. The remaining 50% of the 2008 dividends shall be transferred by OTA to its nonresident shareholders when the tax office issues a clearance certificate in relation to the tax position of the Algerian subsidiary.
Debt ratings agency, Standard & Poors recently warned that difficulties in repatriating the dividends from Algeria could impact the parent group's debt ratings.
"We believe that any substantial delays in repatriation of expected dividends of over $500 million from Algeria could have potential knock-on consequences on liquidity management at Orascom Telecom, where most of the group's rated debt sits.", the debt ratings agency wrote earlier this month. "After having paid cash dividends of about $93 million on Aug. 27, 2009, the delay in receipt of dividends from Algeria could cause liquidity pressures for the substantial investment requirements in newer operations in Orascom Telecom's portfolio such as in Canada, or payment of interest and other cash calls at the parent company level."