Russian firm says could sell Orascom Algeria arm
Norwegian-Russian telecoms firm Vimpelcom on Wednesday said it would consider selling Algerian mobile operator Djezzy to the Algerian government for almost eight billion dollars after it acquires a majority in parent firm Orascom.
Vimpelcom on Monday signed a multi-billion dollar merger deal with Egyptian billionaire Naguib Sawiris, the owner of Orascom, to create the world’s fifth largest mobile operator.
However the fate of Djezzy — seen as one of Orascom’s greatest assets — has been the subject of frenzied speculation since the deal was announced due to the Algerian government’s desire to nationalise the firm over a tax dispute.
“We are absolutely open to this (sale) if the acquisition price is normal, if this is done at a fair price,” Vimpelcom chief executive Alexander Izosimov said on the sidelines of a state visit by Russian President Dmitry Medvedev to the country.
The fair price, he said, “is somewhere in the area of 8 billion dollars. It is 7.8 billion dollars.”
Earlier, Izosimov had said: “We would with pleasure retain this company as part of our assets and manage these assets because no doubt this market has potential.”
“It is hard to make these predictions. For us it is important that relations with the company and the government normalise, to understand what path is chosen.”
Under the multi-billion dollar merger deal, Vimpelcom will acquire all of Italian mobile operator Wind and a majority in Orascom Telecom from Sawiris’ holding firm, which will in return receive a cash payment and substantial stake in the enlarged company.
However analysts have said that the situation with Djezzy represents a major potential problem for the deal.