MOSCOW/CAIRO May 22 Russia-focused telecoms
firm Vimpelcom's talks to sell a controlling stake in
its Algerian mobile business Djezzy to Algeria are at a delicate
stage but have not failed, a source with knowledge of the
discussions said on Wednesday.
Algeria wants to nationalise Djezzy and has pushed Vimpelcom
into discussing a sale of a 51 percent stake.
A report by Dow Jones earlier said that talks had ended in
failure, citing two officials close to the matter.
The source told Reuters that there might be further clarity
on the issue in coming days.
Vimpelcom declined comment. Algerian Finance Minister Karim
Djoudi, who has been handling the issue, told reporters two
weeks ago he would not comment until a deal was concluded.
Vimpelcom took over Djezzy as part of a $6 billion deal
agreed in 2010 to buy assets from Egyptian company Orascom
to help Vimpelcom diversify outside Russia.
Vimpelcom together with subsidiaries owns 51.92 percent of
Orascom Telecom. Djezzy is Orascom's most lucrative asset.
A main point of contention 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 would seek to
international arbitration against Algeria.
Vimpelcom Chief Executive Jo Lunder said in January that
negotiations in Algeria were still in progress. Vimpelcom also
said at the time that it hoped to retain an interest in
Orascom's Algerian business.
A government source told Reuters earlier in May that the
Algerian government would seek a new valuation for Djezzy before
acquiring the 51 percent stake.
One possible complication is that Russian billionaire
Mikhail Fridman's Altimo group - which owns 47.85 percent of
Vimpelcom - in April launched a $1.8 billion offer to buy out
minority shareholders of Orascom. Orascom's management last week
recommended shareholders reject the offer.
Orascom said on Wednesday it was "not a party to any
negotiations between the Algerian government and Vimpelcom
concerning the buy offer and the expected agreement." It also
said Vimpelcom had not informed the company of any developments
in this matter.
A spokesman for Altimo said the company was not a party to