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Algeria says will not negotiate with Vimpelcom - Daily News Egypt

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Algeria says will not negotiate with Vimpelcom

CAIRO: Algeria will hold talks in the first half of 2011 with Orascom Telecom about the nationalization of its local unit, but will not negotiate with Russia’s Vimpelcom, the telecoms minister said. The minister, Moussa Benhamadi, also said an investment bank would be appointed in January 2011 to advise the Algerian government on its acquisition …


CAIRO: Algeria will hold talks in the first half of 2011 with Orascom Telecom about the nationalization of its local unit, but will not negotiate with Russia’s Vimpelcom, the telecoms minister said.

The minister, Moussa Benhamadi, also said an investment bank would be appointed in January 2011 to advise the Algerian government on its acquisition of the unit, known as Djezzy, Reuters reported.

"Talks to acquire Djezzy will take place during the first half of 2011," he told Rueters.

Asked about the role of Vimpelcom, which has signed a $6.6 billion deal to buy Orascom Telecom assets, he said: "We will negotiate with OTH (Orascom Telecom Holding) because it is our partner and the only owner of the license."

Meanwhile, Vimpelcom is reportedly in discussions with Norway’s Telenor, one of its major shareholders, to evaluate OT’s stake in Djezzy, according to Al-Borsa newspaper.

A new term will be placed in the deal which allows Djezzy to be included if it is sold to the Algerian government for more than $2 billion. OT’s stake in Djezzy makes up 12-15 percent of the proposed $6.6 billion deal, Beltone Financial quoted the paper as saying in a note.

Vimpelcom and OT are pricing Djezzy, as a whole, between $1.6 billion and $2 billion, according to close sources. If Djezzy is sold for less than $2 billion, the paper reported, it will be excluded from the deal, bringing down the total value.

Vimpelcom management has previously stated it would be willing to sell Djezzy for its fair market value of $7.8 billion, Beltone said, “the price tag MTN placed on the Algerian telco earlier this year. If the deal values Djezzy at around $2 billion, this increases the chances Algeria’s expected offer price will be met with consideration.”

The new term allows for the deal to proceed with or without Djezzy, Beltone added. If the Algerian offer price is lower than $2 billion, OT would simply sell it to the Algerian government before the close of the Vimpelcom deal and incur the loss themselves.

|The lower Djezzy valuation, as well as the new term allowing for it to be excluded in the deal, is good news for OT shareholders, and this development has improved the probability for a closing of the Vimpelcom-OT deal,” the investment firm concluded. –With additional reporting by Reuters.

 

 

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https://wwww.dailynewssegypt.com/2010/10/26/algeria-says-will-not-negotiate-with-vimpelcom/
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