VimpelCom sold the 51 per cent controlling stake in Omnium Telecom Algeria (formerly known as Djezzy), held by its Global Telecom Holding (GTH) subsidiary, to the the Algerian National Investment Fund (FNI) for US$2.6 billion.
According to a statement by VimpelCom, GTH and the FNI have entered into a “shareholders agreement”, which governs their relationship as shareholders in Omnium Telecom Algeria (OTA) going forward. GTH will continue to exercise operational control over OTA and, as a result, both GTH and VimpelCom will continue to fully consolidate OTA.
“We have entered into a long-term relationship with the Algerian National Fund, creating a private-public ownership structure for Djezzy,” said VimpelCom CEO Jo Lunder (pictured). “With this new ownership structure, Djezzy is positioned better than ever to lead the way in Algeria, offering customers high quality mobile services and the best digital experience. The deal, on a group level, also releases significant cash amounts to GTH and VimpelCom to pay down gross debt.”
The closing of the deal marks the ending of a long-running saga. VimpelCom acquired Djezzy in 2011 as part of a $6 billion deal to buy the assets of Orascom Telecom. It first agreed to sell a 51 per cent stake in the operator to the Algerian government as far back as January 2012.
Algeria’s finance minister said in September 2012 that the government remained interested in acquiring the controlling stake in Djezzy. There had been uncertainty around the deal after the operator was fined $1.3 billion for violating foreign currency regulations in March of that year.
Djezzy is the largest mobile operator in Algeria, followed by Algerie Telecom’s Mobilis and Ooredoo.