ALGIERS/LONDON: Algeria is close to appointing an adviser for the nationalization of Orascom Telecom’s local unit Djezzy, a hurdle to owner Naguib Sawiris’s $6.6 billion deal with Russia’s Vimpelcom.
Algeria opened sealed bids from 10 firms on Wednesday, according to a Reuters reporter attending the procedure at Algeria’s Finance Ministry.
A ministry official said the winning bid would be selected at a later date but "as soon as possible."
Officials read out how long each bidder thought it would take to value Djezzy, with estimates ranging from six weeks to six months. The average estimate was about three months, with investment bank Rothschild indicating its valuation work would take the longest.
Bids from HSBC, Renaissance Capital, Rothschild, Swicorp, Grant Thornton and law firm Curtis, Mallet-Prevost, Colt & Mosle LLP were among those opened.
Billionaire tycoon Sawiris controls Djezzy’s parent Orascom Telecom and Italian telecom firm Wind through his Weather Investment company.
Vimpelcom agreed on Oct. 4 to buy Weather’s assets. That would create the world’s fifth-biggest mobile phone company.
But Algeria hit Djezzy with hundreds of millions of dollars in back taxes — which Orascom disputes — saying it wanted to buy the business itself.
Orascom is eager for talks on valuation to start soon so it can settle how much Algeria will pay for Djezzy and whether some of Djezzy’s equity can be transferred to Vimpelcom.
Vimpelcom’s CEO has said he expects Djezzy to be worth seven times its earnings before interest, taxation, depreciation and amortization (EBITDA). That would value it at about $7 billion.
Orascom reluctantly agreed to talks with Algeria on Djezzy’s nationalization after it was blocked from selling the unit to South Africa’s MTN.
