Djezzy tune

14 October 2010 By Jason Bush

The Norwegian telco, which owns 40 pct of Vimpelcom, is cooling fast on its merger with Naguib Sawiris’ assets. Its reaction to the pricey and dilutive deal was already lukewarm. But uncertainty about Algeria’s Djezzy will reopen old wounds with Vimpelcom’s Russian owners.

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The head of Norwegian telecoms group Telenor Jon Fredrik Baksaas has cast doubt on Russian partner Vimpelcom's $6.6 billion acquisition of Egyptian holding Weather Investments, saying it was no done deal. In an interview with Russian newspaper Vedomosti on Oct. 13 Baksaas stated that it was necessary to "solve issues to make this potential deal possible", noting that they included "the situation in Algeria" and the financing of the deal.

On Oct. 11, the Algerian government announced that it was seeking an investment bank to advise on the nationalisation of Djezzy, with the winner of the mandate to be announced on Nov. 24. On Oct. 8, Algerian newspaper El Watan quoted an anonymous government official saying that Algeria was not willing to negotiate with Vimpelcom over Djezzy.

Under the planned merger with Weather Investments, announced on Oct. 4, Vimpelcom will receive 51.7 percent of Orascom Telecom, an emerging markets telecoms holding owned by Egyptian tycoon Naguib Sawiris, together with 100 percent of Italian mobile operator Wind. Sawiris will receive 20 percent of Vimpelcom, estimated at $4.8 billion, together with $1.8 billion in cash.

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