Algeria: Djezzy valuation disappoints authorities

The process of evaluating the mobile phone operator Djezzy, which the Algerian government wants to buy from Orascom Telecom rather than let the Egyptian owner sell it to a third party, has apparently stalled. The French legal firm Sherman & Sterling, appointed by the government to provide an independent view, has completed its final report on the valuation, but the government has delayed receiving it, after what looks like a disappointing result.

According to “sources close to the file”, Djezzy has been valued at around $7 billion, a sum which is close to the sale price of $7.8 billion demanded by the former Orascom boss Naguib Sawiris when he tried to sell his concession to a South African buyer. The Algerian authorities have indicated that they are willing to pay just $2 billion–3 billion for Djezzy, which is now owned by Russian group Vimpelcom after it bought Orascom Telecom.

The evaluation of Djezzy was scheduled for completion in May this year, and the Algerian authorities indicated that they would go ahead with buying the operator as soon as this process was complete. The delay has met with no official comment or explanation, but it seems that the Algerians are in a something of a bind, and have yet to figure out their next move.

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