Algeria likely to succeed in nationalising Djezzy
Egypt-based Wind Telecom’s chairman Naguib Sawiris says he is optimistic the merger with Russian mobile operator Vimpelcom will go through.
Negotiations have been met with difficulties over Wind’s Orascom unit in Algeria, Djezzy. The Algerian government has decided to nationalise the mobile company and is preparing to undergo arbitration soon. Vimpelcom shareholder Telenor, which owns a 37 per cent stake has threatened to oppose the merger without Djezzy.
|Abu Dhabi construction contract awards ($bn)|
|Source: MEED Projects|
“I have signed the deal now and I am waiting for Telenor’s response. I will do nothing to persuade them.” says Sawiris.
A deadline has not been set, but Telenor has vowed to sign against the deal in a shareholder meeting due to be held on 17 March. Telenor is also dissatisfied with some of the terms, which will see Wind shareholders gain a 20 per cent economic interest and 30.6 per cent voting rights. Vimpelcom is planning to raise $6.5bn in loans to fund the merger and buy Wind’s Orascom assets.
HSBC telecom analyst Kunal Bajaj says: “There is a strong possibility the deal will not go ahead. The due diligence process has not been completed. Telenor has operations in Pakistan and Bangladesh as does Orascom, which would violate the regulations in these countries.”
The Algerian government has proposed a $2-3bn for Djezzy, the country’s biggest mobile operator in terms of subscribers (MEED 10:12:10).