Algerian government looks to block MTN approach for OTA

Algeria has said it will block a proposed deal in which South Africa’s MTN Group would acquire the Algerian assets of Orascom Telecom Holdings.

“The government is opposed to the planned deal between MTN and Orascom with regard to the company OTA [Orascom Telecom Algerie],” said a statement from the Algerian telecommunications ministry.

The ministry warned that “any transaction concerning OTA will be null . . . and could lead to the withdrawal of the . . . licence granted to the company”.

The ministry said Algeria had decided to exercise its “right of pre-emption to the entire capital of this company”, and said that any attempt to circumvent its decision could lead to “expropriating the current OTA shareholders”.

OTH has confirmed that it is in negotiations with MTN and that the talks.

Orascom’s Algerian operation has been the biggest earner for the group, accounting last year for more than half of its EBITDA from its telecoms operations. Total EBITDA amounted to was US$2.24 billion of which Algeria contributed US$1.07 billion.

MTN is understood to be interested in OTH’s other African assets, though Algeria had stood out as the South African operator’s primary target.