Cevital to exercise right of first refusal in Djezzy sale

21 Jun 2013

Algerian food group Cevital, minority shareholder in Algeria’s largest cellco in terms of subscribers Djezzy GSM, has announced its plans to exercise its right of first refusal (RFR) if the negotiations between the Algerian government and Vimpelcom are disadvantageous to its interests, Agence Ecofin reported. According to the article, Cevital’s President of the Board of directors Issaad Rebrab said in an interview on Maghreb Emergent radio, that the shareholder agreement between Orascom Telecom Algeria (a unit of Vimpelcom) and Cevital stipulates RFR in case of sale of a stake by another partner. The RFR gives its holder exclusive rights for negotiations with the majority shareholder, and if the owner sells the asset in question to a third party without offering the holder the opportunity to purchase it first, the holder can pursue legal actions.

According to TeleGeography’s CommsUpdate, negotiations between the Algerian government and the Russian-backed Vimpelcom group regarding the former’s planned purchase of Djezzy were reportedly suspended in May 2013. According to the anonymous sources, at a meeting in Paris two weeks ago, ‘Vimpelcom presented ten points regarding a new shareholders agreement on Djezzy and all of the points were rejected by the Algerian side. After the Paris meetings, the Algerian government stopped any further communication with Vimpelcom.’ Both sides declined to comment on the development, which now throws into doubt the proposed auction of 3G/3G+ service licences. The Algerian government previously postponed the tender in order to complete the acquisition of Djezzy first. In March 2013 the government reportedly approved the plan to transfer Djezzy’s ownership following intervention by Prime Minister Abd Al-Malek Salal, including the official change of its registered name from Orascom Telecom Algeria to Optimum Telecom Algeria, but it appears that the move was stalled once more.

Algeria, Optimum Telecom Algerie (Djezzy), VEON