Algeria gets valuation for Vimpelcom's Djezzy unit
Algeria has received a valuation for Vimpelcom's Djezzy mobile phone unit and is now in talks over nationalising it, Finance Minister Karim Djoudi said on Wednesday, potentially ending an ownership dispute that has dragged on for over a year.
Russian-focused Vimpelcom acquired Djezzy last year as part of a $6 billion deal to buy the assets of Egyptian firm Orascom Telecom, but the transaction immediately became clouded in uncertainty after the Algerian government said it wanted a majority stake.
Vimpelcom agreed in January to sell Algeria a 51 percent stake in the unit which had been the most lucrative part of Orascom's business. It said at the time it had signed a Memorandum of Understanding with the Algerian government to explore the sale subject to an acceptable price.
"The valuation has been done. We have received it. We are now in talks," Djoudi told reporters in parliament on Wednesday.
He declined to give a figure or any more details.
The long-running saga over Djezzy has come to symbolise, for many investors, the risks of doing business in Algeria, a North African energy exporter which in the past few years has swung sharply towards economic nationalism.
Vimpelcom agreed to buy 51.7 percent of Orascom from Egyptian tycoon Naguib Sawiris in 2011, a deal that expanded its horizons out of its Russian heartland and into Italy and North Africa as well as other emerging markets.
Vimpelcom had hoped to gain control over Djezzy as part of the deal, or at least receive a fair market price for the unit from the Algerian government. But the planned nationalisation has been stalled for a year, adding to shareholder pressure on Vimpelcom's management.
The deal had been strongly opposed by Vimpelcom's Norwegian shareholder Telenor, which said the acquisition would saddle the group with too much debt and distract it from recovering market share in Russia.