Egypt’s Orascom Telecom may seek international arbitration to end a dispute with Algeria that is holding up its US$6.6 billion plan to sell assets to Russian telecoms player Vimpelcom, according to a letter seen by Reuters.
Uncertainty over Orascom Telecom’s Algeria-based Djezzy unit — its biggest revenue earner — could sink the US$6.6 billion deal, an outcome which would leave it with heavy debts.
In the letter to Algerian Prime Minister Ahmed Ouyahia and three other senior officials, Orascom Telecom Chairman Naguib Sawiris said he was making his last request to the Algerian government to stop pressuring Djezzy.
He said the unit could not continue doing business unless there was an immediate resolution to the row — which centres around tax claims and allegations of currency violations. He said Orascom had already incurred billions of dollars in losses.
Orascom Telecom has reluctantly agreed to negotiations with the Algerian government, which says it wants to nationalise Djezzy.
But Sawiris said it was increasingly unlikely Algeria would pay a fair price — something he said he would not accept.
“We are concerned that we will be left with no choice but to seek redress through international arbitration proceedings,” said the letter, which was dated November 2.
“The fact is that Djezzy will be unable to continue its business unless the government takes immediate action to resolve the above issues urgently,” the letter said.
The letter called Algeria’s actions “unlawful” and urged Algerian to “either permit Djezzy to operate normally, or pay the full and fair market value for the company”.
The letter was signed by Sawiris, addressed to Ouyahia and copied to the ministers of finance and telecommunications and the central bank governor.
Algerian officials have said that all back-tax claims and other demands against Djezzy have been in accordance with the law, and that Algerian legislation gives it the right to nationalise the unit.
The Algerian prime minister’s office did not answer phone calls from Reuters.
For a PDF of the letter in its original French version, click on r.reuters.com/kyb44q