Veon is selling the whole of its 45.57% stake in Algerian operator Djezzy to the government-controlled investor, which already owns a majority stake.
Neither Djezzy, nor Veon, nor Fonds National d’Investissement (FNI), Algeria’s National Investment Fund, have stated the price being paid for the stake.
FNI has owned a controlling stake in Djezzy’s holding company, Omnium Telecom Algérie, since 2015, when it paid US$2.643 billion for 51% after a 10-year battle between the then owner and the government.
According to the Africa Report, the dispute dates back to 2010, when Egyptian businessman Naguib Sawiris decided to sell Orascom Telecom Algérie, which had operated in Algeria since 2002 under the name Djezzy.
Algeria blocked a planned sale of Djezzy to South African company MTN and put in a claim for €600 milllion in allegedly unpaid taxes.
Sawiris instead sold a stake to what was then VimpelCom — now Veon — and sued Algeria for $4 billion in an international arbitration tribunal. He lost that case last year, and also sold his international Orascom Telecom operations, by then called Global Telecom Holding, to Veon — also a messy transaction.
Algeria’s FNI took its initial 51% stake in Djezzy six years ago and now Djezzy will become a completely state-owned mobile operator. It competes with state-owned Algérie Télécom, which operates under the Mobilis brand, and Ooredoo, which is 68% owned by the government of Qatar.
Veon said: “The exercise of the option initiates a process under which a third-party valuation is undertaken to determine the fair market value at which the transfer shall take place. This important step will further streamline Veon’s operations, allowing for an improved focus on our core markets.”
According to quarterly reports, Djezzy had 15 million customers in late 2019, down from 16.5 million three years before.
Veon’s website says that Djezzy covers 95% of the Algerian population. It launched 4G services in 2016 and plans to cover more than 50% of the population with 4G this year.