Arbitration 'last resort' in Algeria row - Sawiris

Algerian dispute won't impact merger talks with Russia’s Vimplecom - Naguib Sawiris

Tags: AlgeriaEgyptMergers and acquisitionsOrascom Telecom Holding
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Arbitration 'last resort' in Algeria row - Sawiris Naguib Sawiris said he may pursue arbitration if his company is unable to resolve an ongoing dispute over the ownership of Djezzy with the Algerian government. (Getty Images)
By  Shane McGinley Published  November 10, 2010

Orascom Telecom, the Middle East's largest mobile phone operator by users, said on Tuesday it would exhaust all possibilities in its dispute with the Algerian government, but it would pursue arbitration as a last resort.

Naguib Sawiris, CEO of the Egyptian telco, said that resolution of the Algerian dispute would not affect ongoing merger talks between Orascom's parent company, Weather Investments, and Russian mobile operator Vimpelcom Ltd.

"We have been very transparent with VimpelCom about the situation in Algeria and whether this deal happens or not in Algeria, the deal with Vimpelcom will happen," Sawiris told reporters at a conference in Dubai.

The Cairo-based operator is in dispute with the Algerian government over allegations of outstanding back taxes, which led to a ban on the telco transferring money abroad.

The Algerian government has also blocked a bid for Djezzy, Orascom's Algerian unit, by Africa's biggest mobile-phone operator MTN Ltd.

The state has expressed an interest in Djezzy, which it has valued at around $7.8bn.

Sawiris said Orascom has sent a letter to the Algerian prime minister outlining its concerns.

"[We] wait to hear the answer of the Algerian government because we need to exhaust all possibilities. Then if we get a negative reply or we don't get a reply we will start the arbitration," he said.

"[Arbitration] should be the last resort. If we are not going to be invited in a civilised way to sit down, [and] a fair and square exit, we will go to arbitration."

Sawiris told reporters said there was a 50-50 chance the merger with Vimpelcom would go ahead, a transaction which has been valued at around $6.5bn.

However, he confirmed that he was not in talks with any rival bids.

"I don't want to talk to anyone else for now," he said.

In parallel with the resolution of these deals, Sawiris said Orascom was eyeing acquisitions in Eastern Europe.

"We are interested in Serbia and we are interested to look at Poland," he told reporters, with Polkomtel SA, Poland's largest mobile-phone operator, and Telekom Srbija AD in Serbia believed to be the likely targets.

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