April 15, 2012 / 8:38 AM / in 6 years

Vimpelcom unit valued at $6.5bln -Algerian minister

ALGIERS, April 15 (Reuters) - An audit firm hired by the Algerian government has valued Vimpelcom’s troubled mobile phone unit Djezzy at $6.5 billion, a newspaper quoted Algerian Telecommunications Minister Moussa Benhamadi as saying on Sunday.

Algeria’s government has said it will buy a 51 percent stake in the unit from Vimpelcom, although that deal is now on hold after the Russian firm said it would take Algeria to international arbitration over a fine levied on Djezzy

El Khabar newspaper quoted Benhamadi as saying that a valuation commissioned from accountancy firm Shearman & Sterling put the value of all of Djezzy - not just the 51 percent the state wants to acquire - at $6.5 billion.

Last month an Algerian government source told Reuters that the valuation was $6.5 billion for the 51 percent stake. That figure though was queried by analysts, who said it exceeded their estimates for Djezzy’s value.

A valuation of $6.5 billion for all of Djezzy would still be within analyst’s range for a fair market value.

However, Benhamadi said the valuation was only the first phase in the process of reaching agreement over Djezzy’s future, with negotiations between the two sides still to be concluded, the newspaper reported.

Further complicating efforts to reach a deal, those talks are on hold while Vimpelcom disputes a $1.25 billion fine imposed on Djezzy by an Algerian court over currency violations.

Vimpelcom, 35 percent-owned by Norwegian group Telenor , acquired Djezzy last year as part of a $6.6 billion deal to buy assets of Egyptian firm Orascom Telecom.

The transaction immediately became clouded in uncertainty because the Algerian government demanded it be allowed to acquire a majority stake in Djezzy.

Vimpelcom eventually agreed to sell Algeria a 51 percent stake in the unit, subject to a deal on the price and on the understanding it would stay on as operator. Since then though, talks have been beset with delays and disagreements.

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