CAIRO: Orascom Telecom is still negotiating the sale of some of its African assets, a newspaper reported on Sunday, reviving hopes for a possible deal after failed talks with South Africa’s MTN.
MTN had been in discussions to buy some or all of Orascom’s operations, a deal which could have created the world’s third-largest mobile operator if all the Egyptian firm’s assets had been included.
The talks collapsed after the Algerian government refused to let Orascom sell its lucrative unit Djezzy, seen as the deal’s crown jewel, to MTN.
"Orascom Telecom Holding continues to hold a number of negotiations to sell its African units, with the exception of its (Algerian) unit Djezzy," the daily Al-Mal said, citing an unidentified source closely connected with the talks.
Orascom said it had no comment on the report.
In April, a source close to Orascom’s negotiations told Reuters the firm was also talking to a regional operator and a European group present in emerging markets, but did not name the firms.
Analysts say there are plenty of candidates to buy the Egyptian firm’s far-flung operations, which run from North Korea to North Africa.
"A deal to sell African assets, excluding Algeria, should be easier, given the obstacles placed by the Algerian government for the sale of Djezzy," Beltone analyst Sally Gerges said.
"However, the inclusion of Djezzy should have made the deal much more attractive to potential buyers."
The Algerian government says that, under a law enacted in 2009, it has a right to bid on Djezzy before any foreign buyer.
Gerges said the most likely buyer in any African asset sale excluding Djezzy was France Telecom, Orascom’s partner in Egyptian mobile operator Mobinil. Mobinil leads the most populous Arab country’s mobile market by subscribers.
Abu Dhabi-listed Etisalat has also surfaced as a possible candidate after its chairman was quoted as saying it was interested in Djezzy.
Etisalat competes through a subsidiary with Orascom’s Mobinil in Egypt, but trails Mobinil and a local unit of Britain’s Vodafone by number of subscribers.
Shares in Orascom tumbled last week after news the MTN talks had ended stamped out lingering speculation that the Egyptian firm might salvage a deal to sell some smaller African assets, such as its Telecel Globe-branded sub-Saharan units, to MTN.
Analysts said a deal excluding Djezzy would have little meaning for MTN, which is eager to expand and needs a foothold in North Africa.
Orascom also owns a 50-percent stake in a Tunisian operator and operators in Pakistan, Bangladesh and North Korea. It has an equity stake in a Canadian startup wireless carrier and a management contract with a Lebanese operator. –Additional reporting by Alastair Sharp
