Shearman And Sterling

News April 21, 2014

Shearman & Sterling Advises Algerian Fonds National d’Investissement (FNI) on Acquisition of 51% Stake in Orascom Telecom Algérie (Djezzy)

After three years of highly complex negotiations, Algerian Fonds National d’Investissement (FNI), a strategic investment fund controlled by the Algerian State, signed a Share Purchase Agreement related to the acquisition of a 51% stake in Orascom Télécom Algérie SpA (“OTA” or “Djezzy”) from Global Telecom Holding SAE (“GTH,” formerly Orascom Telecom Holding SAE), a majority-owned subsidiary of Russian company VimpelCom Ltd, for a purchase consideration of US$2.643 billion.

FNI and GTH also agreed to enter into a Shareholders Agreement (“the Shareholders Agreement”), which will become effective upon the closing of the transaction, and will govern the parties’ relationships as shareholders in OTA.

Djezzy is the leading mobile network operator in Algeria. The company offers a wide range of services, pre-paid or post-paid, encompassing voice, data and multimedia. Djezzy’s 2013 revenue amounted to US$1.796 billion, with a 2013 EBITDA of US$1.055 billion. As of December 31, 2013, the company’s network included over 17 million subscribers, which makes it the leading mobile phone operator in the country.

Shearman & Sterling advised the Fonds National d’Investissement in this transaction, with a team comprising partners Cyrille Niedzielski and Guillaume Isautier (Paris-Mergers & Acquisitions), of counsel Christian Guilluy (Paris-Mergers & Acquisitions), and associates Barbara Le Chapellier and Olivia Depret-Bixio (Paris-Mergers & Acquisitions), as well as counsel Anne-Sophie Maes (Paris-Tax) and Maude Lebois (Paris-International Arbitration).

"We were honored to be asked to advise the Algerian Government in these highly strategic negotiations and most pleased that they led to a positive outcome for all parties concerned," said Cyrille Niedzielski, leader of the Shearman & Sterling corporate team that acted on the transaction.

FTI Consulting acted as Fond National d’Investissement’s financial advisor.

Samir Sayah, Local Partner in CMS Bureau Francis Lefebvre Algiers office, advised on Algerian law issues.

Akin Gump Strauss Hauer & Feld LLP advised VimpelCom. The financial advisor to VimpelCom was UBS.

The signing of the Share Purchase Agreement also resulted in the stay of the arbitration proceedings initiated by GTH against the People’s Democratic Republic of Algeria under the Algeria-Egypt bilateral investment treaty, with US$16 billion at stake. The proceedings are conducted under UNCITRAL Arbitration Rules and administered by the Permanent Court of Arbitration in The Hague.

Shearman & Sterling represented the Algerian State in the arbitral proceedings, with a team including partners Emmanuel Gaillard and Yas Banifatemi (Paris-International Arbitration) as well as associates Benjamin Siino, Marina Matousekova, Lara Kroop, Tsegaye Laurendeau, Julie Esquenazi, Pierre Viguier and Alexei Kirillov (all Paris-International Arbitration). Global Telecom Holding was represented by a London-based team from Gibson Dunn.

"We have advised and represented the Algerian Government and its national companies since 1965," said Emmanuel Gaillard, managing partner of Shearman & Sterling’s Paris office and head of the firm's International Arbitration practice.

"Algeria is among our oldest and most-valued clients, and we are proud and thankful for this longstanding relationship," added Gaillard, who has represented the Algerian Republic and Algerian energy company Sonatrach in numerous international disputes over the past 25 years.