Orascom has de-consolidated North Korean mobile subsidiary Koryolink, in part to help facilitate a proposed merger with a rival state-owned mobile operator.
Orascom will class Koryolink as an associate instead of a subsidiary from the third quarter, Daily News Egypt reported.
The company has stated that it was clear from the discussions over a potential merger that if such a deal were to materialize, Koryolink's current status as a subsidiary would make it difficult to comply with Egyptian and international financial reporting standards.
The decision is also motivated by the current international sanctions on North Korea which make it difficult for Orascom to impose control over the company.
In addition, the operator has famously faced difficulties extricating profits from North Korea due to the sanctions, as well as other factors such as disparity between the official foreign exchange rate and the true value of North Korean won.
The emergence of a second mobile operator in North Korea came as a surprise, and Koryolink has been attempting to pursue a merger with the operator for months. De-consolidation may bring it one step closer to this goal.
Source: http://www.telecomasia.net/content/orascom-de-consolidates-north-koreas-koryolink