By Alexander Kolyandr
MOSCOW-Russian telecommunications company VimpelCom (VIP) Friday
said it agreed to sell a 51% stake in Algeria's biggest mobile
operator Orascom Telecom Algeria, also known as Djezzy, to the
Algerian National Investment Fund, or FNI, thus ending a
long-standing dispute
Vimpelcom sold the stake for $2.64 billion. However, taking into
account the dividend the Algerian company is set to pay, the full
net proceeds amount to $4 billion.
The acquisition talks had been going on for over two years as
the Algerian government sought to gain control over telecom assets
it regards as being in the national strategic interest.
Aside from reducing a long-standing dispute, the deal leaves
VimpelCom with a 49% stake in Djezzy and reduced debt, amassed in a
shopping spree in previous years.
Vimpelcom bought Djezzy in 2010 from Egyptian tycoon Naguib
Sawiris as part of a more than $6 billion deal with the aim of
diversifying outside Russia. But Algerian government plans to
nationalize the operator hit the business with back tax claims and
various restrictions.
"This favorable long-term agreement and settlement represents a
successful outcome for all stakeholders," said Vimpelcom Chief
Executive Jo Lunder.
Moscow-based Otkritie brokerage said the deal was done on "very
favorable terms" for the Russian company. The deal is expected to
be closed in the fourth quarter of 2014.
VimpelCom is Russia's third largest telecom operator by revenue
after Mobile TeleSystems and MegaFon and the seventh largest
telecom company globally.
Write to Alexander Kolyandr at alexander.kolyandr@wsj.com
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