Algeria seeks advisers on nationalising Orascom unit
Algiers, October 11, 2010
Algeria said on Monday it was seeking investment banks and consultancies to advise on the nationalisation of Djezzy, the local unit of Egyptian group Orascom Telecom and its biggest source of revenue.
Russian mobile phone operator Vimpelcom had hoped to acquire Djezzy as part of a $6.6 billion deal to gain control over Orascom Telecom assets, but Algeria's announcement suggested that possibility was receding.
A notice in Algeria's official El Moudjahid newspaper said the ministry of finance wanted "to select a partner to assist the Algerian state in the process of acquiring the 'Orascom Telecom Algeria' company".
It said the deadline for bids was Nov 24 and the winner would be announced the same day.
A deal between Vimpelcom and Orascom Telecom chairman Naguib Sawiris would create the world's fifth biggest mobile phone operator, but analysts have said uncertainty over Djezzy could scupper the deal.
"Interviewing potential advisers makes a compromise (with Vimpelcom) less likely," said Dalibor Vavruska, emerging market telecoms analyst at ING. "If the Russians (do not get Djezzy) they should really rethink their position towards the entire deal."
Algeria still considers Orascom Telecom as Djezzy's owner and will not negotiate its future with Vimpelcom, an Algerian newspaper quoted an unnamed government source as saying last week.
The deadline for the Algerian government to select advisers on the nationalisation indicated that there was unlikely to be clarity on Djezzy's future for some months, but analysts said that time-frame was expected.
"We were always looking at around year-end anyways," said Mike Millar, head of research at Naeem Brokerage in Cairo. "But it is still possible that they could cook something before year-end." - Reuters
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