TMCnet News

Algerian government to take 51% stake in Djezzy [CommsMEA (United Arab Emirates)]
[April 22, 2014]

Algerian government to take 51% stake in Djezzy [CommsMEA (United Arab Emirates)]


(CommsMEA (United Arab Emirates) Via Acquire Media NewsEdge) The Algerian government has taken a 51% stake in mobile operator Orascom Telecom Algeria (OTA) for $2.6bn.

The deal will allow OTA, which operates under the Djezzy GSM brand, to further its investment in 3G networks in the country.

Vimpelcom, the parent company of OTA/Djezzy will sell the stake, held by it's Egypt-based subsidiary Global Telecom Holding (GTH, previously OTH), to Fonds National d'Investissement (FNI), the Algerian National Investment Fund.

The deal will settle a long-running tax dispute between Djezzy and the Algerian government. Prior to completion of the transaction, Djezzy will pay a dividend of US$1.9bn to GTH and a fine of $1.3 billion to Bank of Algeria. All tax disputes between the parties will be resolved, international arbitration on Djezzy will be suspended and settled at closure of the transaction.



The transaction will reduce Vimpelcom's holding in OTA to 46%, but Algerian food company Cevital will sell its 3% stake in the company to Vimpelcom for $178m.

The total dividends and proceeds due to GTH at the closing of the deal are expected to amount to $4 billion. Vimpelcom/GTH will retain management control of Djezzy.


Jo Lunder, CEO of Vimpelcom commented: "This favourable long-term agreement and settlement represents a successful outcome for all stakeholders. For Vimpelcom and GTH, this value accretive transaction releases $4 billion in cash proceeds to pay down gross debt. For GTH and Djezzy, it resolves our dispute in Algeria and allows us to solidify our strong leadership position in Algeria by enabling us to further invest in a high speed 3G network to take full advantage of the potential for mobile data growth in the country. We look forward to working with our new partner, the Algerian National Investment Fund, to drive the business forward and to create significant long-term value for all of our stakeholders in line with our strategic value agenda." (c) 2014 ITP Business Publishing Ltd. All Rights Reserved. Provided by Syndigate.info, an Albawaba.com company

[ Back To TMCnet.com's Homepage ]