Algeria still plans to take Orascom’s Djezzy

Daily News Egypt
4 Min Read

ALGIERS/MOSCOW: Algeria still plans to nationalize Orascom Telecom’s local unit, complicating Vimpelcom’s $6.6 billion acquisition deal ahead of the Russian president’s visit to the country on Wednesday.

Russian billionaire Mikhail Fridman’s Alfa-Group and Norway’s Telenor have agreed to combine Vimpelcom with the assets of Naguib Sawiris, once Africa’s richest man, to create the world’s fifth-largest mobile telecom company, but left the future of Orascom’s Algerian unit unresolved.

Following the cash and shares deal, Orascom plans to list as two stocks on Egypt’s bourse to split off the company’s Egyptian and North Korean assets.

Orascom’s investment in Algeria, which accounts for almost 50 percent of the group’s revenue, is the subject of a row with Algiers over hundreds of millions of dollars in back-tax claims.

"Any change in the shareholding of Orascom Telecom Holding (OTH) does not undermine commitments already made to give Orascom Telecom Algeria (OTA) to the Algerian state," Mohamed Benmeradi, the Algerian Industry and Investment Promotion Minister, told the APS official news agency on Tuesday.

He said Djezzy was not involved in talks between Orascom and Vimpelcom, and that Algeria was ready to acquire the unit.

Plans to sell some Orascom’s assets, including Djezzy, to South Africa’s MTN in June were effectively scuppered by the Algerian government, which said it wants to buy Djezzy.

Long-running feud

But without the outspoken Egyptian Sawiris, who some say is a thorn in Algeria’s side, a solution may be found.

Sawiris said he was optimistic the chances of resolving the Algerian dispute were higher now that he was no longer part of the negotiations.

"We are simply telling them if you are upset with Mr. Naguib, well Mr. Naguib is gone," Sawiris told a Cairo press conference.

Tensions between the Algerian government and the Sawiris family go back to 2008, when Orascom Construction Industries, led by Sawiris’s brother Nassef, sold its Algerian cement business to France’s Lafarge.

Algeria has fraught ties with its former colonial ruler and Algiers felt it should have been consulted.

Vimpelcom CEO Alexander Izosimov said he was keen to hang on to Djezzy and would travel to Algeria with Russia’s President Dmitry Medvedev.

"The presence of Medvedev is not exactly a coincidence. Now a deal has been announced he can raise the issue of Djezzy. That Russia and Algeria both have oil and gas assets is helpful — common ground can be found," said Elena Mills, senior analyst at Alfa Bank.

When asked whether Orascom would pursue international arbitration against Algeria, Sawiris said: "I don’t want to clash with Algeria … this has to be the final solution and the worst solution."

He added that the pressure on the Algerian unit had pushed him to do the Vimpelcom deal sooner than he would have liked. –Aditional reporting by Dina Zayed and Alexander Dziadosz

 

 

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