Djezzy GSM

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Djezzy GSM launched services in February 2002 as the first private mobile company in Algeria, competing with state-owned incumbent Algerie Telecom. Djezzy was owned by Orascom Telecom Algeria S.P.A., a consortium made up 51% by Orascom Telecom Holdings (Orascom) and 49% by local and regional investors and institutions. Orascom signed the license agreement on July 31, 2001, having submitted a payment guarantee to the government for US$368.5 million (the initial installment of the US$737 million license fee total Orascom bid to win the GSM license). Under the deal, Orascom can pay for the license in two tranches, does not have to pay for a renewal of the license, and has the rights to an international gateway, which will allow it to bypass the network of the state-owned Algerie Telecom, after two years. The second installment of the license fee was due at the end of 2003. The AIG African Infrastructure Fund LLC made an initial investment in Orascom Algeria S.P.A. in the form of US$15 million Convertible Note. The project’s network equipment was provided by both Alcatel and Siemens. In December of 2003, Orascom announced that it had closed US$663 million in debt and equity financing consisting of US$529.4 million in debt facilities, US$104 million in new equity and US$31.6 million in convertible shareholder loans. The funds were to be used to pay the US$360 million outstanding debt to the government for the GSM licence granted in July 2001, thereby meeting a December 31, 2003 deadline set by the Algerian authorities. Beyond the payment of the GSM license, the financing was to fully fund the expansion of Orascom’s network until end of 2004. The debt financing was arranged by Credit Lyonnais s.a. (France) and West LB AG (Germany) and represented a landmark in international structured financings for Algeria. In March 2005, Orascom increased its ownership in Djezzy to 87.68%. Other shareholders include Emirates International Investment Company (EIIC) and a local investor. Under the terms of Djezzy’s license, OTH is required to retain more than 50% of the share capital and voting rights of Djezzy at all times. In October 2010, Orascom Telecom Holding was acquired by VimpelCom as part of a larger deal that included Wind Italy, for a total sum of $6 billion. (The deal concluded on April 15, 2011.) In January 2012, the Algerian state announced its interest to buy back the 51% of shares in Djezzy held by VimpelCom. On January 2015, VimpelCom and its subsidiary Global Telecom Holding announced the closing of the sale by GTH of a 51% interest in Djezzy to the Algerian National Investment Fund, Fonds National d’Investissement (the “FNI”), for USD 2.6 billion.