The Algerian government and Russia’s Vimpelcom Group have formed a new company to operate Orascom Telecom Algeria, which operates under the ‘Djezzy’ brand. The development was revealed to Bloomberg by Vincenzo Nesci, Djezzy chairman, who confirmed that the new unit, Optimum Telecom Algerie, was formed on 2 December. The entity is 51% owned by the Algerian government, with the remaining stake held by Amsterdam-headquartered Vimpelcom.
The North African country’s government has been in discussions for more than two years to purchase a stake in the lucrative Djezzy unit, which was previously controlled by Egyptian telecoms tycoon Naguib Sawiris through his Orascom Telecom Holding (OTH) unit, which was merged with Vimpelcom in a USD6.5 billion deal in April 2011.
In October 2010, prior to the completiton of that deal, Vimpelcom conceded that it was happy to sell its future stake in Djezzy, but only if the Algerian government was willing to match its USD7.8 billion valuation – more than Sawiris’ accumulated assets were eventually sold for. According to local media reports at the time, the government envisioned a figure in the range of USD2 billion–USD3 billion for the cellco.