Now this one is for those among you who have lived here in Oman for a little while, but
The dragon picked up on this and wrote about how bad of a deal he thought it was, and speculated at who the shares were being bought from (he named the Omani investor - benefits of being an anonymous blogger). He noted that the shares were being purchased at approx PKR 25/share, when the shares were previously trading at PKR 10/share earlier in the year (2007).
By 2009 the CEO of Omantel quit (due to personal reasons - he later apparently re-emerged as under secretary for the ministry for transport and communications) it was right around that time when it was being reported that WorldCall Telecom needed an additional cash injection as the companies value had fallen to just $29 million (despite Omantel investing $190 million for a 56.8% stake in the company less than 2 years before, and then bumped this up to 65% by injecting another $50 million in 2009). That takes Omantel's investment worth approximately $19 million (down from $190 + $50 million). Excellent investment indeed! Gulp.
Ultimately sometime around the end of 2010, Omantel asked its shareholders if it could invest a further $70 million into WorldCall because WorldCall themselves as a company had not been able to raise the investment themselves - again as the shrewd Dragon pointed out - not a very good sign.
And then we come to the end of 2016, and with it, Omantel's 4th quarter Chairmans Report, which noted that Omantel's investment in WTL was listed as an asset held for sale - but the report declined to note how much this sale would be made for. Shares in WTL at the end of December 2016 were now worth just PKR 2.9 - down from Omantel's purchase price of PKR 25.
Imagine my surprise when I saw the above story on the front cover of the Muscat Daily the other day where I saw that Omantel have written off its entire investment into WorldCall Telecom Ltd... which means they either sold their 65% stake in the business for nothing, didn't sell it and have written it off, or got so little from the sale they didn't need to report it (perhaps they'll write in any proceeds from the sale in its 2017 report). Sorry for the bad picture, I thought it'd appear online, but I've not been able to find it - only in the paper!
Now, its great that Muscat Daily reported this at all, but they failed to miss the massive implications of their simple news brief: Omantel invested a total of $240 million into a business not even in Oman, and its been written off... entirely! If I were a shareholder I'd be mighty pissed off! It's not the fact that Omantel wrote-off this investment in 2015 and 2016 internally, its the fact that a quasi-Government company (at the time of the investment the Government was rumoured to still own upwards of 70% of Omantel) invested $190 + $50 by buying (at least for the $190 initial part) it from an Omani business person right here in Muscat - and 10 years later that money's worth zip!
Ho hum, easy come-easy go right? Especially when you can charge everyone living in Oman whatever you want for international calls!