Algeria and Russian operator Vimpelcom have signed a non-binding Memorandum of Understanding (MoU) regarding the sale of Algerian mobile operation Djezzy, signalling the end to a long-running ownership dispute.
Vimpelcom said in a statement it has…
Algeria and Russian operator Vimpelcom have signed a non-binding Memorandum of Understanding (MoU) regarding the sale of Algerian mobile operation Djezzy, signalling the end to a long-running ownership dispute.
Vimpelcom said in a statement it has agreed to sell a majority stake in Djezzy to Algeria, subject to agreement on price and other considerations. The two parties have also agreed to consider other mutually-beneficial acquisition scenarios.
Meanwhile, Algeria’s Ministry of Finance has announced it will acquire 51% of Djezzy from Vimpelcom, Reuters reported quoting Algerian state news agency APS.
Vimpelcom would stay on as operator of the business.
Vimpelcom acquired Djezzy as part of a US$6bn deal with Egyptian-based parent company Orascom Telecom Holdings (OTH). But before the merger was completed, Algeria accused Orascom of tax irregularities and declared it would nationalise Djezzy.
In the statement, Vimpelcom said it and Algeria’s Ministry of Finance will now begin the process of valuing Djezzy with the help of their respective financial advisers.
The company added the deal will require the approval of OTH, which has not been party to the discussions on the MoU or the proposed sale.
Vimpelcom currently owns 51.7% of OTH which, in turn, owns 96.81% of Djezzy.
“It is contemplated that the governance and management control of [Djezzy] would be structured so as to permit OTH and consequently Vimpelcom to continue to consolidate [Djezzy] under International Financial Reporting Standards,” the statement added.
