Algeria’s government wants to buy 100% of Orascom Telecom Algérie, the local subsidiary of Egypt’s Orascom Telecom, according to Karim Djoudi, the country’s finance minister.
As the state can stop foreign investors from changing the ownership of any…
Algeria’s government wants to buy 100% of Orascom Telecom Algérie, the local subsidiary of Egypt’s Orascom Telecom, according to Karim Djoudi, the country’s finance minister.
As the state can stop foreign investors from changing the ownership of any company based in Algeria, Djoudi’s comments have further reduced the chances of Orascom Telecom selling all or part of its Algerian subsidiary to South Africa’s MTN.
Djoudi is the second minister to tell Orascom that the Algerian government will stop the Egyptian company from changing the ownership of the company’s largest mobile phone operator, which trades as Djezzy.
“The transaction must conform to national laws. Algeria is ready to buy 100% of the operator,” said Djoudi in a statement on the state-run Algérie Presse Service newswire.
Algeria generates greater revenues for Orascom than its other operations in Egypt, Tunisia, Bangladesh, Pakistan, North Korea, Burundi, Central African Republic, Namibia or Zimbabwe.
Djezzy’s pre-tax profit margins are also higher than those of Orascom’s other businesses. In 2009, Djezzy generated 49% of group EBITDA.
However, Djezzy has drained Orascom’s coffers this year after the Algerian tax authorities forced the operator to pay US$597m in back taxes. Orascom has taken its appeal against the tax bill through the country’s judicial system, but it has lost every single time. It has only one appeal left open to it.
The Tunisian government has yet to give its opinion on Orascom’s deal with MTN.
On 29 April, however, a spokesman for Orascom’s local subsidiary Tunisiana told Bloomberg that the Tunisian authorities would probably approve the deal.
Orascom shares the ownership of Tunisiana with Qatar’s Qtel. Both companies own 50% stakes and have the same level of management control.