CAIRO: The Algerian government has hired a financial consultant in the sale of Djezzy, Orascom Telecom's local outfit, reported the Algerian newspaper Ennahar. The local paper explained that Karim Djoudi, the Minister of Finance, is to present a report this coming Saturday on the agreement struck last week between the financial consulting office of Hadj Ali Mohand Samir and the Ministry of Finance. The deal stipulates that the financial consulting office would advise the ministry through the entire purchasing process of Djezzy. The newspaper states that bringing a financial consultant onboard will allow the Algerian government to “assess the financial position” of Djezzy or Orascom Telecom Algeria (OTA), upon which Algerian authorities can establish a valuation for the operation. The government valuation will be the basis for purchasing between 49 percent and 100 percent of the company. In a written note from regional investment bank Beltone Financial, the news reported by the local Algerian newspaper clearly indicates that the Algerian government is preparing to make an offer for Orascom's Algerian unit. The step taken by the government is “in line with the Algerian government's statement last month that ‘an expert valuation, not a market value would be used when foreigners sell stakes in Algerian firms to the state,'” Beltone said. The note also explains that it believes that, with the government taking an expert valuation approach over a market valuation one, the investment firm predicts that the offer made by the Algerian government will be “far from the ‘market value'” of $7.8 billion, which was the figure offered by MTN, the South African operator. The MTN-Djezzy deal, worth an estimated $10 billion, collapsed due to Prime Minister Ahmed Ouyahia's intervention. The PM stated that any deal without prior government approval would be void. The Algerian government had presented Orascom Telecom (OT) with a tax receipt of $596.6 million, to which OT has objected. Beltone indicated that it was uncertain where the recent agreement with VimpelCom, a Russian telecommunications firm, would fit into this context. As the deal with the government could lead it to purchase less than 50 percent of Djezzy, the remaining 51 percent could be purchased by a third firm, along side other Orascom assets. Naguib Sawiris, Chairman of Orascom Telecom Holding SAE, has undertaken talks to merge his telecom business with VimpelCom in a deal worth $25 billion. Should the deal go through, it would create a telecom company with a reach of 200 million customers, spanning the Middle East, Africa and the former Soviet republics.
