VimpelCom and Global Telecom Holding (GTH) have completed the sale of a 51 per cent stake held by GTH in Algerian mobile operator Djezzy to the Algerian National Investment Fund (FNI) for $2.6 billion.
The move is the conclusion of a deal reached between VimpelCom and Algeria last April that brought to an end a long-running dispute over the ownership of the mobile operator.
On completion, GTH will continue to retain operational control of the mobile operator. VimpelCom owns 51.9% of GTH.
The ownership of Djezzy has been a cause of controversy since VimpelCom acquired its then parent company Orascom Telecom Holding in 2011. The Algerian government was keen to take control of the telco but failed to reach an agreement with VimpelCom. Over the past few years it has imposed a number of foreign exchange and import restrictions on OTH, and issued demands for back tax. All those issues were settled as part of the stake sale agreement.
"Today, we have entered into a long-term relationship with the Algerian National Fund, creating a private-public ownership structure for Djezzy. With this new ownership structure, Djezzy is positioned better than ever to lead the way in Algeria, offering customers high quality mobile services and the best digital experience. The deal, on a group level, also releases significant cash amounts to GTH and VimpelCom to pay down gross debt," VimpelCom CEO Jo Lunder said in a statement on Friday.
In August last year, HC for Securities and Investment valued the 51% stake at $2.54 billion. With the state having agreed to pay just 4% more than that for the shares, "it is our opinion that the purchase price is fair," the advisor said in its report.
