Algeria says won't allow Orascom unit sale to MTN

Algeria's government has rejected a request for South African group MTN to be allowed to buy Egyptian group Orascom Telecom's Algerian mobile phone unit Djezzy, saying it would exercise the right to acquire the business itself.

• ‘The Algerian state holds to its right of pre-emption over the sale of Djezzy … and will not allow its purchase by the South African firm MTN,’ trade minister Hachemi Djaaboub said in comments carried by official news agency APS on Wednesday.
• South Africa’s deputy trade minister Maria Ntuli, visiting Algeria this week, had called on Algeria to ease the way for MTN to acquire Djezzy, according to a financial source present at a meeting between the two governments.
• Ntuli was among South African officials accompanying President Jacob Zuma during a two-day visit to Algeria.
• Algeria blocked the Djezzy sale last month and said it wanted to buy the business, dealing a blow to MTN’s plans to buy all or part of Orascom Telecom’s assets and create what could be the world’s third-biggest mobile phone service provider.
• Djezzy is regarded as a jewel among Orascom Telecom’s foreign assets, accounting last year for about a third of the Egyptian parent company’s revenues. Buying it would give MTN a much-needed foothold in North Africa.

• Algeria’s decision to bar the sale followed tensions over back tax claims against Orascom Telecom worth $646.6 million.