Orascom Tel must settle debts before deal: Algeria
Algiers, October 31, 2010
Orascom Telecom must settle all its liabilities before Algeria will conclude a deal to nationalise the Egyptian firm's local mobile phone unit, Algerian Prime Minister Ahmed Ouyahia said on Sunday.
Orascom Telecom has reluctantly agreed to negotiate terms for the nationalisation of its Djezzy unit and now wants the deal concluded as quickly as possible, but the new conditions imposed by Algeria are likely to delay the process.
Some analysts say prolonged uncertainty over Djezzy -- Orascom Telecom's biggest source of revenue -- could jeopardise a $6.6 billion deal for Russia's Vimpelcom to acquire Orascom assets, creating the world's fifth-biggest mobile operator.
Speaking in parliament, Ouyahia confirmed Algeria would go ahead with the nationalisation and that the government recognised only Orascom Telecom as the owner and not Vimpelcom.
He said experts were evaluating the value of the unit, after which talks would start to agree on the sum Algeria will pay Orascom Telecom to nationalise Djezzy.
"The day we reach an agreement on the price, Orascom Telecom Holding will have to clear its (liabilities with the Algerian government) before we conclude the deal," Ouyahia told lawmakers.
He said those liabilities included $230 million in back-taxes, plus penalties, $190 million in fines to the central bank for alleged currency violations, and a dispute with former employees who claim they are owed wages.
Both the back-taxes and the central bank fines had previously been reported but Algeria had not previously made them a condition of concluding a deal on Djezzy's future.
The Algerian prime minister said the wage claims related to a fixed-line joint venture between Orascom Telecom and Telecom Egypt, called Lacom, which is now no longer operating. - Reuters
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