OTMT’s board of directors has agreed to immediately start the procedure of terminating ORABANK, a microfinance entity in North Korea that is 95%-owned by OTMT and is unrelated to the mobile operation, Koryolink. All of the bank’s cash and liquid assets will be transferred to a subsidiary of OTMT in order to comply with sanctions by the Office of Foreign Assets Control (OFAC, a body of the US Department of Treasury that administers and enforces US economic and trade sanctions). Moreover, all management operations related to the real estate operations in North Korea will also be transferred to an OTMT entity in North Korea.   The impact of this termination is negligible, as management explained to us that the operation is quite small and is merely meant to comply with the OFAC regulations. OTMT stated that the enforced sanctions on North Korea have made the operating environment in the country increasingly harsh. We fully discount the value of Koryolink to zero in our valuation as we believe –given the current outlook and available information– that OTMT will remain unable to repatriate profits nor exit the operation. We reiterate our Sell rating on OTMT. (Company disclosure, Omar Maher, Karim Riad)   OTMT: EGP0.91 as of 04 December 2016, Rating: Sell, TP: EGP0.53 per share, MCap: USD273mn, OTMT EY / OTMT.CA