(Recasts, adds detail of shareholder meeting, Vimpelcom
By Asma Alsharif
CAIRO Aug 21 The parent of telecoms group
Djezzy has released a valuation of the Algerian company ahead of
a shareholder vote on the sale of a stake to the Algerian
government, potentially paving the way to the completion of the
over $2 billion deal.
Citing a study it commissioned from financial advisers HC,
Djezzy's parent Global Telecom Holding (GTH) said the
stake was worth $2.539 billion, meaning the $2.6 billion price
which the Algerian government had agreed to pay would be pitched
at 4 percent premium to its estimated fair value.
GTH's parent, Amsterdam-based Vimpelcom, had agreed
the sale to the Algerian government in April, but it remains to
be voted on by shareholders including minority owners at a
meeting scheduled for Aug. 26.
Vimpelcom said the release of HC's report was a mandatory
disclosure ahead of the meeting. It needs 66.7 pct of the votes
of those present to be in favour, which could prove undemanding
given Vimpelcom's 52 percent stake in GTH.
No-one at GTH could immediately be reached for further
"The offered buy price is higher by 4 percent than the fair
price," HC was quoted as saying in the statement, which included
a detailed explanation of the methodology behind the valuation.
Via GTH, Vimpelcom had bought Djezzy, or Orascom Telecom
Algeria, in 2010 from Egyptian tycoon Naguib Sawiris as part of
a more than $6 billion deal as it aimed to diversify outside
During that same year, Algeria made moves to nationalise
Djezzy, hitting the business with back tax claims and
restrictions on imports and foreign exchange transactions.
With the sale agreement, Vimpelcom therefore resolves a
long-standing ownership dispute with the Algerian government,
while keeping its control and slashing debt. The dispute had
weighed on Vimpelcom shares, which closed in New York at around
$8.6 on Wednesday, well below a peak of around $19 set in 2010.
The statement said the deal should also be positive for
"The continuation of the firm (Djezzy) ... depends largely
on the completion of the deal, while the alternative is to
continue the dispute with the Algerian government that could
harm the value of the company," the advisers said.
The deal will help Vimpelcom reduce its $27.5 billion of
gross debt, built up in an acquisition spree, by $4 billion. GTH
will keep a 45.6 percent stake and will buy the remaining 3.4
percent of Djezzy shares from minority shareholder Cevital for
$178 million, Vimpelcom said in April.
(Additional reporting by Maria Kiselyova in Moscow; Editing by
Jason Neely and David Holmes)