Azernews.Az

By Bloomberg

Orange SA, France's largest phone company, is considering a separation of its African assets in an initial public offering to free up funds to bolster its European business.

No details nor timing have been decided, as the considerations are still at an early stage, a spokesman for Paris-based Orange said by phone. The company may include its Middle East assets in the IPO.

The assets that may be split off include holdings in carriers that have about 100 million subscribers in countries from Egypt to Mali, many of them Orange's fastest-growing businesses. An IPO would give Orange funds to cut debt and pursue acquisitions as its cash flow in Europe is hurt by falling phone bills amid price wars.

Sales in Africa and the Middle East rose 9 percent to 1.1 billion euros ($1.4 billion) last quarter, compared with a 4.2 percent decline in France, Orange's largest market. Sales in Mali jumped 36 percent and revenue in Guinea gained 57 percent.

Shares of Orange added 0.4 percent to 11.09 euros at 10:39 a.m. in Paris. The stock had risen 23 percent this year through yesterday.

Lions, Fighters

Under Chief Executive Officer Stephane Richard, Orange has sold assets in countries including the Dominican Republic and Switzerland. Richard has said he is looking at opportunities to expand Orange's business in markets such as Spain and Romania.

As European markets saturate, phone-service revenue in Africa and the Middle East is rising as consumers start using mobile phones for the first time and use the devices to access the Internet.

On the flip side, emerging markets provide carriers with unique challenges. In Iraq, running a network is troublesome because forces from the Islamic State, a militant Sunni Muslim group, have made it too dangerous to go near sites, Orange's head of Africa and the Middle East Marc Rennard said in an interview in London last month. In Africa, Orange field agents handle situations ranging from lion encounters to frequent power outages.

French newspaper L'Agefi today reported that Orange's new finance chief Ramon Fernandez and Gervais Pellissier, head of European business, had discussed an IPO in meetings with investors.