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Algeria denies pressuring Orascom Telecom
Telecoms minister says acquisition of local unit is legal.
September 23, 2010 3:17 by Reuters
Algeria’s telecommunications minister on Thursday denied applying pressure on the local unit of Egypt’s Orascom Telecom , saying the state’s acquisition of the business was in accordance with the law.
Orascom Telecom’s owners agreed to sell the lucrative Djezzy unit to the Algerian state after it was hit by back-tax demands and the government blocked a deal to sell Djezzy to South Africa’s MTN .
Naguib Sawiris, Orascom Telecom chairman, accused the Algerian authorities of cracking down on Djezzy because they saw it as too successful and profitable.
Asked by reporters to comment on that allegation, Telecommunications Minister Moussa Benhamadi said: “There is no pressure. We want to preserve Djezzy because it generates wealth like other Algerian and foreign companies operating here.”
“It is not in our interests to create financial problems for Djezzy but we have to implement the law,” Benhamadi said on the sidelines of a session of parliament.
“Orascom has expressed its willingness to sell. We need to implement the law. Algerian law has provided guarantees for Djezzy since the launch of its operations and made it possible for it to have 15 million customers.”
The Algerian government has appointed a local firm of consultants to value Djezzy and reccommend how much the Algerian state should pay to acquire it.
Benhamadi declined to give an approximate price for Djezzy, saying he awaited the results of the valuation. “I prefer to use Algerian expertise (for the valuation) but we will use foreign expertise if necessary.”
Djezzy has been the biggest single source or revenue for Orascom Telecom.
Sawiris is in talks to merge his holding company Weather Investments, which owns just over half of Orascom as well as operators in Italy and Greece, with telecoms group Vimpelcom , but analysts say uncertainty around Djezzy could scupper the deal.
(Writing by Christian Lowe; Editing by David Cowell)