Djezzy stake sale looks to be on course

The sale of a controlling stake in Algerian operator Djezzy to the country’s government looks likely to go ahead after the agreed price was deemed fair.

Financial adviser HC said a fair price for the 51 per cent stake held by VimpelCom subsidiary Global Telecom Holding (GTH) is US$2.54 billion, four per cent lower than the us$2.64 billion deal agreed with the government.

VimpelCom acquired Djezzy in 2011 as part of a US$6 billion deal to buy the assets of Orascom Telecom. It first agreed to sell a 51 per cent stake in the operator to the Algerian government in January 2012.

Algeria’s finance minister said in September 2012 that the government remained interested in acquiring the controlling stake in Djezzy. There had been uncertainty around the deal after the operator was fined US$1.3 billion for violating foreign currency regulations in March of that year.

According to a Bloomberg report in April, GTH will retain a 49 per cent stake in Djezzy and continue to have operational control, based on a shareholder agreement with the government fund.

Djezzy is the largest operator in Algeria, with 17.7 million connections at the end of the second quarter. Algerie Telecom’s Mobilis was second with 13.1 million connections, while Ooredoo had 10.9 million.

According to VimpelCom’s second quarter results, Djezzy launched 3G services in seven provinces in July.