Reports have confirmed that shareholders of the Egypt based international mobile network operator, Orascom Telecom, have given their approval for a major rights issue to raise a whopping $800 Million, with the aim to strengthen the balance sheet, while the company battles with a tax dispute involving its Algeria subsidiary.

Last month, the telecom company was faced with a surprise bill for $596.6 Million in back taxes and penalties, but Orascom has said that it is all set to challenge the tax assessment.

While announcing the rights issue, Chief Executive Khaled Bichara said that the proceeds would sound a reassuring message throughout the organization that it has enough funds to operate normally even if Algeria continued to not allow the transfer of dividends out of the country.

"We did the capital increase because some of the rating agencies came and said there was a question mark on the cash flow of Orascom. We wanted to strengthen our balance sheet to say we have enough cash now for the next 24 months even if there will not be - and we are not saying there will not be - dividends from Algeria", said Mr. Bichara.

As shared by the company, the tax authorities had calculated its total revenue for 3 years at $5.25 Billion, as opposed to its revealed figure of $4.42 Billion.