VimpelCom to sell Djezzy stake

Russian carrier VimpelCom said Monday it has agreed to sell a majority stake in its lucrative Algerian unit, Djezzy, to the Algerian state for an undisclosed sum.

The move would end an ongoing dispute over ownership of the asset, involving companies from three countries. VimpelCom bought Djezzy in 2011 as part of a $6bn acquisition of Egyptian carrier, Orascom Telecom’s holdings, but the deal was hampered by calls from the Algerian government to nationalise the telco.

VimpelCom owns 51.7 per cent of Orascom, which in turn owns 96.81 per cent of Orascom Telecom Algeria, the holding company behind Djezzy.

Should a suitable price be agreed upon, it is expected the Algerian state will take 51 per cent of Djezzy, leaving VimpelCom with an interest in the business and still able to consolidate Djezzy into its financial results.

The funds, which may be in the region of $3bn to $4bn, would help VimpelCom pay down its massive debt pile.