Govt resumes Djezzy talks with Vimpelcom

15 Nov 2011

Algiers is in the midst of renewed talks with Vimpelcom aimed at resolving the future ownership of lucrative mobile phone operator Djezzy. Reuters, citing comments by Algerian finance minister Karim Djoudi, reports that efforts to find a resolution are now expected to speed up, after more than a year of deadlock. Djoudi told the news agency: ‘Things are taking place normally. I have had a meeting with a Vimpelcom representative at his request. Unfortunately, I cannot give you details because we are in talks … It is possible that things will go fast. There is a willingness on the other side to make things go fast. We have opened the data room which gives us access to all [Djezzy’s] details’.

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, his telecoms holding company with interests in a number of countries. Throughout the transaction, which concluded on 15 April 2011, Algiers stated its intention to privatise the lucrative mobile operator, and attempted to force Orascom’s hand by hitting the telecoms firm with substantial back taxes. For its part, in October 2010 Vimpelcom conceded that it was happy to sell Djezzy, but only if the Algerian government was willing to match its USD7.8 billion valuation – more than the Russian firm eventually paid for Sawiris’ collective telecoms assets. According to local media reports, the Algerian government envisioned a figure in the range of USD2 billion–USD3 billion for the cellco. At this juncture it remains unclear kind of deal is on the table, but industry speculation suggests that the Algerian government is keen to acquire a 51% stake in the cellco, with Vimpelcom retaining the remainder of the equity and acting as the network operator.

Algeria, Optimum Telecom Algerie (Djezzy), VEON