Court postpones Djezzy’s $1.25 billion fine (Algeria)
The appeal hearing regarding a $1.25 billion fine on Djezzy has been postponed until May 27 as reported by Reuters. The appeal hearing on the local mobile phone unit of Russian telecoms firm Vimpelcom had already been postponed once, a week earlier.
As per the report, Djezzy chief executive Tamer El Mahdy, who has been convicted in the case and faces jail if the conviction is upheld, was not in court for Sunday’s hearing. A lower court ruled in March that Djezzy and its CEO were guilty of violating foreign exchange regulations. Djezzy’s parent company denied the allegations against it and its chief executive, and lodged an appeal.
Reuters reveals that Djezzy has been the subject of a long-running dispute with the Algerian government, during which the firm has been hit by back-tax demands, threatened with nationalisation, and put under criminal investigation. Vimpelcom acquired Djezzy last year when it bought the assets of previous owner, Egyptian firm Orascom Telecom.
Under pressure from the Algerian government, Vimpelcom agreed to talks on selling a controlling stake in Djezzy to the Algerian state. However, the decision to impose the $1.25 billion fine soured those talks and prompted Vimpelcom to announce it was going to international arbitration against Algeria.
Telenor increases stake in VimpelCom (Europe)
Telecom operator Telenor has increased its stake in Russian operator VimpelCom to 35.7 percent from 31.7 percent, in an attempt to increase its presence in the Russian mobile market.
According to a report by Nasdaq, VimpelCom’s share price has come under pressure of late as the result of a drawn-out negotiation process over its merger with Egyptian Orascom Telecom and the Algerian government.
The report reveals that while uncertainty over VimpelCom’s North African ventures may pressure the stock in the short-term, investors with a longer time horizon could follow Telenor’s lead and take advantage of the attractive entry point.
Like other emerging market telecom firms, VimpelCom will continue to benefit from the increased penetration of smart devices and a concomitant rise in lucrative mobile data revenue. Given the positive macro trends in the sector, combined with a projected annual growth rate of 26 percent and a strong free cash flow position, VimpelCom could be a good buy at these levels.
Algeria may pay $6.5 billion for Djezzy (Algeria)
Algeria may be required to pay $6.5 billion to acquire a controlling stake in Vimpelcom’s Algerian mobile phone unit, a top finance ministry source said on Wednesday, potentially ending a dispute that has dragged for over a year, as reported by Reuters.
The report revealed that the a source said that the deal is that Algeria will pay $6.5 billion to acquire 51 percent of Djezzy.
Russia-focused Vimpelcom acquired Djezzy last year as part of a $6 billion deal to buy the assets of Egyptian firm Orascom Telecom, but the transaction immediately became clouded in uncertainty after the Algerian government said it wanted a majority stake in the unit. Djezzy was the most lucrative part of Orascom’s business.
France Telecom to receive second round bids for Orange Switzerland (Europe)
France Telecom, a leading telecommunications service provider, is expected to receive the second round bids for its Swiss unit, Orange Switzerland, from five potential buyers. According to reports, some of the shortlisted investors include Providence Equity Partners, Apax Partners and EQT Partners. Sources claim that Naguib Sawiris, founder of Orascom Telecom may also bid for Orange Switzerland along with cable company Liberty Global Inc.
As reported by Wireless Federation earlier, the sale of Orange Switzerland was a strategic decision taken by France Telecom in an attempt to achieve sustained growth in a struggling industry and focus its attention on the emerging markets.As per sources, France Telecom hopes to receive between US$ 1.95 billion and US$ 2.60 from the sale.
The sale being advised by Perella Weinber Partners along with Lazard Ltd. is expected to be finalized in the beginning of 2012, wherein France Telecom will reportedly announce the company chosen to acquire its unit.
Orascom Telecom seeks partners for Orange Switzerland bid (Europe, Egypt)
According to reports, Naguib Sawiris, founder of Orascom Telecom is looking for partners in order to bid for Orange Switzerland valued at around $2.8 billion. Other people who have shown their interest in acquiring the France Telecom SA mobile-phone unit, include Xavier Niel, founder of Iliad, and private equity firms Apax Partners LLP and EQT Partners. As per sources, when questioned about Mobinil, Sawiris said that he has no plans to sell his stake in Mobinil which belongs to Orascom and other shareholders.
As reported by Wireless Federation earlier, France Telecom is hopeful of finalizing a deal for its Switzerland unit by the end of this year and plans to target the emerging markets in the Middle East and Africa. Further, the group may also be looking to sell its units in Austria and Portugal.
Orascom Telecom plans to raise $2.4 bn (Egypt)
Orascom Telecom (OT) has announced that it is planning to raise its capital to $2.35 billion from US$1.26 billion pounds and that it planned to divide the company into two.
Orascom will call a general meeting on April 13 to approve the company split as well as the capital increase, which it said it would use to fund its debt, but did not give any further details.
Shareholders of Russian mobile operator, VimpelCom earlier this month approved a $6 billion-plus purchase of Wind Telecom, which owns OT, creating one of the world’s biggest mobile operators by number of subscribers.
According to OT, the VimpelCom deal would improve its negotiating position with the Algerian government over the fate of its unit in the country.
The firm has been locked in a long-running dispute with Algeria over the unit, Djezzy, its biggest single source of revenue. Uncertainty over its future had complicated the VimpelCom deal.
Algeria’s government, which said it will nationalize Djezzy, has hit the unit with hundreds of millions of dollars in back taxes and barred it from moving profits abroad.
It also blocked Orascom from selling the unit to South Africa’s MTN.
Russia’s VimpelCom shareholders approve Wind Telecom deal
Russia’s VimpelCom has announced that its shareholders have approved the previously announced combination of VimpelCom and Wind Telecom, although Telenor is still objecting to the merger of the two companies.
Shareholders representing 93.1% of the Company’s voting shares participated in the Special General Meeting. The resolutions at the Special General Meeting were approved by 53.3% of the voting shares that participated in the meeting. Of the Company’s public shareholders, actually present though, just 39.8% voted in favor of the resolutions and 60.2% voted against the resolutions.
According to Alexander Izosimov, CEO and President of VimpelCom, the approval of this transformative combination with Wind Telecom by their shareholders will lead to the creation a new global telecom player with over 173 million mobile subscribers covering a population of 838 million people. The combined group will have a significantly diversified revenue base, substantially larger scale of operations, and potential synergies estimated to be US$2.5 billion on a net present value basis. This transaction and the shareholder vote underscore the Company’s dedication to delivering substantial value creation for shareholders and their commitment to corporate governance excellence.
The completion of the Transaction is subject to certain conditions precedent, such as receipt of regulatory approvals and receipt of funds to finance the Transaction. Completion of the Transaction is expected to occur in the first half of 2011.
Following completion of the Transaction, VimpelCom will own, through Wind Telecom, 51.7% of Orascom Telecom and 100% of Wind Italy.
MTN eyes 49% NetOne stake (South Africa, Zimbabwe)
State-owned mobile operator NetOne’s MD Reward Kangai has revealed that the company is in talks with South Africa’s MTN and other African mobile firms about selling a 49% stake.
NetOne is the smallest mobile operator by subscriber numbers in Zimbabwe, lagging behind Econet Wireless and Telecel, a local unit of Egypt’s Orascom Telecom.
Reward Kangai valued NetOne at between $500 million and $800 million. He did not disclose the other African operators. The company expects an agreement during the second quarter of the year. It is expected that NetOne’s subscriber base will increase to 2.5 million this year from 1.6 million in 2010.
He added that the company was hindered by the country’s telecommunications laws from selling more than 49% of its shares to a strategic investor.
Zimbabwe has a low mobile penetration rate, which makes it attractive to large mobile operators seeking to expand their footprint on the African continent.
He also stated that NetOne’s turnover would double to $200 million in 2011 boosted by an increase in subscribers and a recovering economy. It (low mobile penetration) presents an opportunity for the company to grow, which also presents business opportunity for the strategic partner.
Alfa selects Ericsson for 3G network contract in Lebanon
Lebanon based mobile network operator, Alfa has signed a network expansion contract with Ericsson for the deployment of a 3G network in the country.
As per the contract, Ericsson will be responsible for the upgrade and modernization of the current Alfa mobile network to 3G/ HSPA+ technology across the country.
Alfa is a state-owned mobile network managed by Egypt’s Orascom Telecom. Earlier this month, Orascom Telecom signed a one-year extension to its ongoing management contract to look after the mobile network. The contract, signed with the Lebanese Ministry of Telecom, will run until February1, 2012.
Orascom Telecom renews management contract with Alfa (Lebanon)
Orascom Telecom has signed a one-year extension to its ongoing management contract with Lebanese mobile network, Alfa. The company has signed the contract with the Lebanese Ministry of Telecom and will run until 1st February 2012.
The renewal of the contract is an opportunity for Orascom Telecom to execute the long-term development plans and projects it is planning for the telecom sector in Lebanon, and on top of those, comes the introduction of 3G in Lebanon.
This is in addition to introducing a new variety of services, expanding Alfa’s coverage to new regions and spreading the outreach of information technology services to all over Lebanon.
According to Orascom Telecom Lebanon Chairman & CEO, Mr. Marwan Hayek, they are pleased to renew their management contract of the first Lebanese mobile telecom network with Lebanon’s Ministry of Telecom, which is an opportunity for them to re-emphasize their commitment towards the Lebanese mobile market. They are looking forward to the future, to accomplish new achievements within Alfa, and to support the Lebanese mobile sector in regaining its pioneering position in the region, in line with the ambitious plan set by the Lebanese Ministry of Telecom for the sector.
