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[April 23, 2014]
Vimpelcom To Sell $2.6bn Orascom Telecom Algeria Stake [Ventures Africa]
(Ventures Africa Via Acquire Media NewsEdge) VENTURES AFRICA – Russian telecoms giant Vimpelcom is set to put an end to a lengthy stand-off with Algeria, after agreeing to sell a 51 percent stake in Orascom Telecom Algeria, a locally owned subsidiary.
Orascom Telecom Algeria was acquired by the Russian company in 2010 from Egyptian billionaire, Naguib Sawiris for $6 billion, seeking then to diverse its asset portfolio beyond the shores of Europe.
However, since its purchase, Vimpelcom has been faced with a series of restrictive policies aimed at stifling business growth, with the Algerian government quite keen on nationalizing the telecom firm at the time.
"Back tax claims" and policies restricting imports and foreign exchange dealings were levied on the Orascom during that period to tighten business environment, which ultimately had a negative impact on its share value, a report by Ahram Online revealed.
Tension between both parties seem to have cooled off on Friday as Vimpelcom revealed its partly owned subsidiary, Global Telecom Holding has reached a $2.6 billion deal with the Algerian National Investment Fund (FNI) for the acquisition of a 51 percent stake in Orascom, popularly called Djezzy in the country.
“It’s a great day for the company. It has been a three-year journey, and now it has come to an end,” Vimpelcom CEO Jo Lunder was quoted by Ahram Online.
Vimpelcom, Russia's third largest telecom operator, will hold a 45 percent stake in the local subsidiary but will remain in control of operations.
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