Vimpelcom eyes talks with Algeria after Wind deal

Reuters News
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Posted: Apr 15, 2011 10:55 AM
Vimpelcom eyes talks with Algeria after Wind deal

MOSCOW (Reuters) - Vimpelcom will next week seek talks with Algeria on a disputed unit of Orascom Telecom after completing a deal to buy Orascom and other telecoms assets of Egyptian tycoon Naguib Sawiris.

Vimpelcom on Friday closed a more than $6 billion cash-and-shares acquisition of 51 percent of emerging markets specialist Orascom and 100 percent of Wind of Italy in a deal that will see Vimpelcom take on $20 billion of debt and create the world's sixth-largest mobile provider.

Alexander Izosimov, chief executive officer of Vimpelcom, told Reuters there had been "neither progress nor regress" with regard to Djezzy -- the most lucrative unit of Orascom that the Algerian government wants to nationalize.

Orascom's chairman Sawiris on Thursday expressed doubt that Vimpelcom would succeed in talks with the Algerian government, and its CEO Khaled Bichara said if the talks did not succeed, Orascom would seek international arbitration.

"All comments on the matter are purely personal views and not facts...Next week, we will start to seek a dialogue. We have no indications that the situation has worsened and no indications that it has improved," Izosimov said in a telephone interview.

"We still believe the dialogue will take place," he added.

Uncertainty over Djezzy as well as concerns over the future influence of Sawiris clouded the deal for some shareholders, including major co-owner Telenor.

The Nowegian telecoms group had fought a battle with Alfa Group to have the deal blocked, claiming it made no financial or strategic sense for Vimpelcom, and is pursuing an arbitration that aims to avoid stake dilution.

Vimpelcom said there was no information to provide in this regard, saying only it would comply with any arbitration outcome.

Vimpelcom plans to consolidate the financial results of Wind Telecom, the owner of Orascom and Wind, from Friday, the company said in a statement.

"Vimpelcom has already commenced integration initiatives and we are focused on realizing synergies, particularly in the area of procurement, and capitalizing on the company's strengthened leadership, scale and market expertise," Izosimov said.

The company had earlier estimated synergies could total $2.5 billion, and Izosimov said on Friday more synergies could emerge on the marketing and financial front.

Vimpelcom said it has appointed Bichara, former CEO of Wind Telecom, to the newly created position of President and Chief Operating Officer, reporting to Izosimov.

(Reporting by Maria Kiselyova and Anastasia Teterevleva; editing by John Bowker and Jane Merriman)