Sawiris skeptical on Orascom/Vimpelcom deal

OSLO (BestGrowthStock) – Egyptian billionaire Naguib Sawiris said the chances of completing a $6.6 billion merger between his company Orascom (ORTE.CA: ) and Russian mobile operator Vimpelcom (VIP.N: ) were at best 50 percent.

Sawiris said Norway’s Telenor (TEL.OL: ) — which owns nearly 40 percent of Vimpelcom — was “not motivated” to see out the merger, which faces hurdles in Algeria as well as regulatory issues in other countries.

“Now, I doubt anything will come from the merger. Telenor is not motivated, as I see it. It’s 50-50 at best that anything will come of it,” Sawiris told Norwegian newspaper Dagens Naerinsliv.

A spokeswoman at Orascom’s headquarters in Cairo confirmed the comments to Reuters on Sunday. Telenor said it had no further comment until the merger issue returned to Vimpelcom’s board.

Algeria has asked Orascom’s local unit Djezzy — the parent firm’s single biggest source of revenue — to pay hundreds of millions of dollars in back-taxes, which Orascom disputes, and has blocked the firm from transferring money out of the country.

Algiers derailed an earlier plan to sell Djezzy to South Africa’s MTN (MTNJ.J: ) and is now preparing to nationalize the unit. Analysts expect any offer from the government to be below Djezzy’s fair value.

Orascom has assets in Bangladesh and Pakistan where Telenor also has mobile operations, raising worries a deal with Vimpelcom could face regulatory hurdles in those countries.

Telenor has repeatedly aired doubts over the Vimpelcom-Orascom deal. Late last month it asked for clarification of the merger parameters before Vimpelcom’s board makes a final decision on the deal.

(Reporting by Wojciech Moskwa; Additional reporting by Alexander Dziadosz in Cairo; Editing by Erica Billingham)

Sawiris skeptical on Orascom/Vimpelcom deal