Sawiris lodges USD5 billion claim in Djezzy case while Vimpelcom still confident of positive outcome

19 Nov 2012

Weather Investments, the telecoms holding group led by Egyptian businessman Naguib Sawiris, has filed a USD5 billion claim against the government of Algeria in a legal battle which centres on Weather’s former local subsidiary mobile operation Orascom Telecom Algeria (Djezzy). Weather claims that the government went back on the obligations it gave when Djezzy was first licensed in 2001 to avoid interference with the operator. According to Weather’s legal filing with the World Bank’s International Centre for the Settlement of Investment Dispute (ICSID), Algeria has ‘since 2008, pursued a campaign of interference and harassment which has cost Weather Investments over USD5 billion in damages’. Sawiris claims that the government’s actions forced Weather to sell Djezzy to Vimpelcom of Russia in 2011 because it prevented the payment of dividends to overseas owners. The Algerian government has denied the allegations, saying Sawiris has ‘no case’, the Financial Times reports.

Separately, Djezzy’s current owner, Russian telecoms group Vimpelcom, says it is confident that it can reach an agreement with the Algerian government over the future ownership of Djezzy. The state is keen to re-nationalise a 51% stake in the telco, while the Russian firm wants to retain an interest through its regional subsidiary Orascom. Vimpelcom’s chief executive Jo Lunder has told investors: ‘We are negotiating with the Algerian government a solution where the government will buy into Djezzy and be a shareholder alongside Orascom’. Although a legal case is ongoing between the two sides, Lunder said he is optimistic that a solution will be reached.

Algeria, Optimum Telecom Algerie (Djezzy), VEON