The price the Algerian government has agreed to pay for a 51% stake in domestic mobile operator Orascom Telecom Algeria (OTA), which operates in the country under the Djezzy GSM brand, has been deemed ‘fair’ by independent financial adviser HC Securities and Investment. According to a valuation report commissioned by Djezzy’s parent Global Telecom Holding (GTH), the stake is worth USD2.539 billion, and the USD2.6 billion the Algerian government had agreed to pay would provide 4% premium on the estimated fair value. The report was published ahead of a shareholder vote, scheduled for 26 August 2014.
As previously reported by TeleGeography’s CommsUpdate, in April 2014 Djezzy’s parent company Vimpelcom Ltd of Russia will sell portion of its 96.81% stake in the cellco, held via its Egypt-based subsidiary GTH, to Fonds National d’Investissement (FNI). Following the transaction, which is expected to be finalised by end-2014, Vimpelcom’s shareholding in OTA will decrease to 46%; Cevital, which owns 3% of the operator, however has agreed to sell its share to Vimpelcom for USD178 million, bringing the Russian-backed company’s holding to 49% of Djezzy GSM. The total dividends and proceeds due to GTH at the closing of the deal are expected to amount to USD4.0 billion. Vimpelcom/GTH will retain management control of the Algerian cellco, and will continue to consolidate the operator’s results under International Financial Reporting Standards (IFRS).