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Algeria urges Orascom to exit mobile market, say sources - Daily News Egypt

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Algeria urges Orascom to exit mobile market, say sources

ALGIERS: The Algerian government wants Egyptian group Orascom Telecom to relinquish ownership of Algeria s No. 1 mobile phone operator, government and finance industry sources said. We don t want Orascom any more, said a senior government official with direct knowledge of the Orascom Telecom issue who asked not to be named. The government considers …


ALGIERS: The Algerian government wants Egyptian group Orascom Telecom to relinquish ownership of Algeria s No. 1 mobile phone operator, government and finance industry sources said.

We don t want Orascom any more, said a senior government official with direct knowledge of the Orascom Telecom issue who asked not to be named.

The government considers Orascom s way of doing business in Algeria as not in its interests, said a financial industry source familiar with the government s thinking. The consequence of that is that Orascom should exit the Algerian market.

Orascom Chairman Naguib Sawiris said in an email that he had no comment on the report. A spokesman for the firm s Algerian unit, Djezzy – which represents Orascom Telecom s single biggest source of income – also had no comment.

Last year Algeria s government said Orascom owed it $597 million in back taxes and penalties. The Egyptian company, which has a stake of over 90 percent in Djezzy, either directly or through subsidiaries, is appealing the decision.

Industry sources and analysts say Algeria is unlikely to force Orascom Telecom out directly, but that it could use indirect pressure to persuade it to sell.

Cairo-based investment bank EFG-Hermes has valued Djezzy at $5.4 billion. It said it sees $6.4 billion as a minimum fair value for a sale of the unit.

Shares down

Trading on the Egyptian exchange, where Orascom s common shares are listed, was closed before the news, but its London-listed GDR shares dropped sharply to close 3.65 percent lower at $5.80.

In an interview published on Monday, Sawiris said Orascom Telecom wanted to stay in Algeria but would consider exiting if it felt unwelcome.

Djezzy started operating after Orascom Telecom bought a 15-year Algerian mobile telephone license in 2001 for $737 million. Its figures for the third quarter of this year showed it had a 62.9 percent market share.

Algerian media reports have named several possibly buyers of the unit, including Algerian state telecoms firm Algerie Telecom and France s Vivendi.

Algerian private firm Cevital, which owns a 3.19 percent stake in Djezzy, and unnamed Gulf-based companies have also been identified as possible suitors. None of the companies has said publicly they are interested in buying.

According to a law that was passed last year, the Algerian state and state companies will have the right of first refusal if Orascom Telecom sells Djezzy.

Orascom Telecom s relations with the Algerian government soured in early 2008 when a sister firm, Orascom Construction Industries (OCI), sold its Algerian cement manufacturing assets to France s Lafarge/

The transaction angered Algerian officials who believed they should have been consulted.

The Djezzy headquarters and dozens of the firm s shops in the Algerian capital were ransacked in November by crowds angry about violent incidents surrounding a soccer World Cup qualifying match between Algeria and Egypt. -Additional reporting by Alastair Sharp in Cairo

Topics: FJP

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https://wwww.dailynewssegypt.com/2010/02/17/algeria-urges-orascom-to-exit-mobile-market-say-sources/
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