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VimpelCom to sell 51% of Orascom Telecom Algerie for $2.64bn

Staff writer |
VimpelCom Ltd. and its unit Global Telecom Holding S.A.E. (GTH) announced that they have signed a share purchase agreement for sale by GTH of a 51% interest in Orascom Telecom Algerie SpA to Fonds National d'Investissement for a purchase consideration of $2.643 billion.

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Orascom Telecom Algerie, or Djezzy, operates a mobile network in Algeria. Fonds National d'Investissement, or FNI, is an Algerian National Investment Fund. Global Telecom Holding SAE, formerly Orascom Telecom Holding SAE, is an Egypt-based company engaged in provision of mobile telecommunications in Africa, Asia and North America.

Djezzy will distribute a dividend of $1.862 billion to GTH immediately prior to the closing of the deal, which is expected to occur by the end of 2014.

The total dividends and proceeds due to GTH at closing are expected to total $4.0 billion, net of all taxes and after the settlement of all outstanding disputes between the parties and payment of associated fines.

All proceeds from the transaction will be used to pay down the outstanding shareholder loans provided by VimpelCom to GTH.

As a result of the settlement of the disputes, both Global Telecom Holding and VimpelCom will take a one-off charge of $2 billion in their 2013 financial statements. Upon closing, GTH and FNI will enter into a shareholders agreement, which will govern their relationship as shareholders in OTA going forward.

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