x Abu Dhabi, UAEFriday 28 July 2017

Orascom ups ante in Djezzy row

The Algerian government is the target of the operator's ire over unit sale bid.

Naguib Sawiris, the executive chairman of Orascom, alleges the Algerian government had placed restrictions on its Djezzy unit.
Naguib Sawiris, the executive chairman of Orascom, alleges the Algerian government had placed restrictions on its Djezzy unit.
Orascom Telecom will seek arbitration with the World Bank to settle its dispute with the Algerian government if negotiations to sell the operator's Djezzy unit are not successful, says the company's chairman.
The company is locked in a battle to sell its Algerian business to the government after it was hit with a US$230 million (Dh844.7m) tax bill.
Naguib Sawiris, the executive chairman of Orascom Telecom, alleged the government had prevented the operator from advertising in the country, paying its suppliers and importing SIM cards to gain new subscribers.
Orascom Telecom is the largest telecommunications operator in the Arab world with a total of 120 million subscribers in the Middle East, Africa, Europe, Canada and North Korea.
"We have sent a letter to the Algerian prime minister, we have advised him of all the wrongdoings that have happened to us," Mr Sawiris said yesterday in Dubai.
"We have documented them for the final time. We have expressed clearly that our preferred modus of solution is to sit down with them.
"I don't know how you can buy something from someone without sitting with them. We have to wait for the answer of the Algerian government. If we get a negative reply or no reply we will go to arbitration . under the auspices of the World Bank."
Mr Sawiris said Orascom was looking to sell Djezzy for more than the $7.8bn the unit was valued at in 2008 when the South African operator MTN made an unsuccessful attempt to buy it.
The Algerian government values Djezzy at about $3.5bn. "We are a company with a very high esteem of ethics that works around the world and [no similar dispute] has ever happened to us. We've never been accused of tax evasion or anything ." said Mr Sawiris.
"We feel that what has happened with us is unfair and we hope [for] . an honourable and just exit."
Mr Sawiris also said he was not confident a deal to merge Orascom's assets with VimpelCom in a cash and stock transaction worth $6.6bn would be completed, after comments by a major shareholder in the Russian operator. Jon Fredrik Baksaas, the chief executive of Telenor, the Norwegian operator that owns 40 per cent of VimpelCom, said he was not happy with the deal given the uncertainty regarding Djezzy and the Algerian government.
"You don't want to partner with someone who doesn't want to partner with you or think it's a good deal," Mr Sawiris said. "We are continuing with the transaction . but you are never sure until things are done."
dgeorgecosh@thenational.ae