Bank assets of Orascom Telecom’s (OT) Djezzy will be frozen and property will be seized if the Algerian telecom operator is late on reassessed tax charges of $230 million for 2008 and 2009, reported Algerian state-run newspaper Ennahar.
Currently, 25 days remain for Djezzy to pay the reassessed taxes before it receives the final notice in accordance with the law to give an official response, after which legal measures could be pursued which would result in a total freeze of Djezzy’s bank accounts and the seizure of its physical property, Beltone Financial reported.
According to Ennahar, since Djezzy’s management claimed a need to review the taxes assessed on October 3, the tax department has received no confirmation from Djezzy or OT’s management, indicating the reassessed taxes will be paid, noted the article.
Djezzy has also chosen not to pay even 20 percent of the total amount, which would have allowed OT to present an appeal to the Tax Administration.
In a note, Beltone commented, “The more legal problems Djezzy is involved in the more unappealing the Vimpelcom/OT deal will appear to be to Vimpelcom. The fact that OT has not indicated any intent on future payment of the taxes further hints that the deal will be restructured and possibly reconsidered.”
Vimpelcom is in talks to buy Naguib Sawiris’s Italian unit Wind and his 51-percent stake in OT in a deal potentially worth $6.5 billion.
Problems in Algeria may present a stumbling block to the Vimpelcom/OT deal announced earlier this month, or at the least, lead to a reassessment of the proposed deal’s structure.
“Algeria is continuing to highlight that it is increasing hostile to FDI, which will have future repercussions economically,” Beltone added.
