Algiers attempt to value Djezzy derailed by disclosure row

8 Jun 2011

According to Reuters, the Algerian government’s valuation of Orascom Telecom Algeria’s (OTA’s) local mobile phone unit, Djezzy, has been delayed by a disagreement regarding the disclosure of company data. Citing two telecoms sector sources, who spoke on the condition of anonymity, Reuters suggests that Djezzy has refused to allow government-appointed law firm Shearman & Sterling access to its database; Shearman & Sterling was hired in January 2011 to conduct a valuation of Djezzy, with the process expected to be completed by end-May 2011. The first source told Reuters: ‘The valuation has not been done yet because Djezzy refused to allow Shearman access to its database. Djezzy has demanded that Shearman sign a non-disclosure document. Sherman should have finished the job, but it was unable to complete it because of the non-disclosure condition made by Djezzy’.

The hotly contested Djezzy unit has been the source of much speculation in recent years, and came to the fore in 4Q10 following Vimpelcom’s agreement with Egyptian billionaire Naguib Sawiris to purchase Wind Telecom (formerly Weather Investments), the telecoms holding company with interests in Orascom Telecom and Wind Telecomunicazioni (Wind Italy). Throughout the transaction, which concluded on 15 April 2011, Algiers stated its intention to privatise the lucrative Djezzy unit, and attempted to force Orascom’s hand by hitting the telecoms firm with substantial back taxes.

Algeria, Optimum Telecom Algerie (Djezzy)