Cairo-Mubasher: Global Telecom Holding’s (GTH) sale of 51% stake in Algeria’s Djezzy is expected to reap the fruits of imminent growth in Algeria’s telecoms industry, said Prime Research in a report.
The research firm expected a positive impact on the company’s operating and financing activities in coming years, especially as it ends all outstanding disputes.
Prime expected GTH to record $300 million savings annually from cost of debt servicing, which will in turn reflect positively on profit margins for the coming years.
Vimpelcom Ltd and its subsidiary GTH announced closing the deal to sell GTH’s 51% stake in Algerian mobile operator Djezzy to Algerian National Investment Fund (FNI) for $2.6 billion.
Global will keep operational control of the Algerian mobile operator.
The sale to the Algerian National Investment Fund (FNI) is the result of a deal reached last April between GTH's Russian parent firm Vimpelcom and Algeria to end a dispute over the country's moves to nationalise Djezzy.
"The deal, on a group level, also releases significant cash amounts to GTH and Vimpelcom to pay down gross debt," Jo Lunder, chief executive of Vimpelcom, said in the statement.
GTH’s extraordinary general meeting had approved in August an offer to sell 51% in the Algerian unit to FNI.
According to the report, the resolution of outstanding disputes included removing restrictions on Djezzy’s transfer of foreign cash to its parents company. Thus, the Algerian unit will transfer $1.8 billion in profits for the period from 2008-2012.
The report issuer also said GTH is planning to receive all future annual dividends from the Algerian company as cash distributions.
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