The Algerian government will seek a new valuation for Vimpelcom’s local mobile subsidiary Djezzy before acquiring a 51% stake in the company, an anonymous source told Reuters. The initial valuation was appointed to law firm Shearman and Sterling LLP, however no official figures have been released. It is unclear who is going to be responsible for the new valuation, as the Algerian finance ministry declined to comment.
According to TeleGeography’s GlobalComms Database, The North African country’s government has been in discussions for more than two years to purchase a stake in the lucrative Djezzy unit, which was previously controlled by Egyptian telecoms tycoon Naguib Sawiris through his Orascom Telecom Holding (OTH) unit, which was merged with Vimpelcom in a USD6.5 billion deal in April 2011. In October 2010, prior to the completion of that deal, Vimpelcom conceded that it was happy to sell Djezzy, but only if the Algerian government was willing to match its USD7.8 billion valuation – more than Sawiris’ accumulated assets were eventually sold for. According to local media reports at the time, the government envisioned a figure in the range of USD2billion–USD3 billion for the cellco.