MOSCOW, March 25 Russian mobile firm Vimpelcom
may soon reach a deal to sell a controlling stake in its
Algerian business, Djezzy, to Algeria after the government
decided to lift a ban on foreign exchange transfers, Vedomosti
Vimpelcom took over the Algerian mobile company as part of a
$6 billion deal agreed in 2010 to acquire assets from Egypt's
Orascom. Algeria wants to nationalise Djezzy and has
pressured Vimpelcom into discussing the sale of a controlling
A main point of contention, however, is a ban on foreign
exchange transfers enforced by the Bank of Algeria in 2010 on
Orascom Telecom Algeria, which operates under the commercial
brand Djezzy. The ban prevents it from buying equipment abroad.
The government in March 2012 slapped a $1.3 billion fine on
Djezzy for violating the foreign currency regulations, souring
the talks and prompting Vimpelcom to announce it was going to
international arbitration against Algeria.
The Algerian government has decided to lift this foreign
currency ban, the Russian daily newspaper Vedomosti reported on
Monday, and Vimpelcom may soon part with its stake.
Following the transfer, Djezzy will be renamed Optimum
Telecom Algeria, the report said, citing Algerian newspaper
A source with knowledge of the negotiations said, however,
that discussions were continuing and a deal had not yet been
reached. The source said it was unclear whether the Algerian
government had reached a decision on the money transfers.
A spokesman for Vimpelcom declined comment.
Vimpelcom Chief Executive Jo Lunder said in January that
negotiations in Algeria were still in progress and that it aimed
to start investing in Algeria later this year. Vimpelcom said at
the time that it hoped to retain an interest in the Algerian
The Russian company has been reviewing its asset portfolio
to focus on its most profitable businesses as part of efforts to
boost cash flow and reduce debt and is also looking at options
for its Canadian unit Wind Mobile.
VTB analyst Ivan Kim said in a research note that if the
Algeria deal is resolved and there is a sale of the Canadian
business, there could be a "good run" in Orascom's stock and
that the news would also be positive for Vimpelcom. He estimated
Djezzy could be worth $5 billion.