BARCELONA, Nov 15 (Reuters) - Vimpelcom is confident that it will eventually come to a solution with the Algerian government over the ownership of mobile operator Djezzy, even though it has also started litigation as part of the standoff.
Russia-focused Vimpelcom acquired Djezzy last year as part of a $6 billion deal to buy the assets of Egyptian firm Orascom Telecom.
Under pressure from the Algerian government, Vimpelcom agreed to talks on selling a controlling stake in Djezzy to the Algerian state.. The Algerian government then imposed a $1.3 billion fine on Djezzy for violating foreign currency regulations, souring the talks. Vimpelcom appealed against the ruling prompting analysts and media to speculate that the talks would be called off.
“Algeria is still in negotiation mode and I‘m very much personally involved in those discussions,” Chief Executive Jo Lunder told an investor conference organised by Morgan Stanley.
“We are negotiating with the Algerian government a solution where the government will buy into Djezzy and be a shareholder alongside with Orascom,” he said, adding that he was optimistic in terms of finding a solution but could not give guidance on the timing of any solution.
Lunder said the group was at the same time preparing its litigation case. “But still the preference on our side is to find a solution and become joint shareholders with the government and develop Djezzy.”
Lunder also used the three-day long investor conference to explain the group’s current review of strategy, after it began analysing its smaller entities as part of a portfolio review.
“The strategy is to increase cash flow,” he said. “There are a number of smaller assets that we have decided we would like to look at.”
Reporting by Kate Holton; Editing by Elaine Hardcastle