A high-level South African political delegation to North Africa's Algeria, accompanied by president Jacob Zuma, has called on the country's government to smooth through MTN's plans to buy Orascom.
According to Reuters, an unnamed source present at a meeting between the delegation and Algerian officials says SA's deputy trade and industry minister, Bongi Maria Ntuli, said: "We wish that Algeria helps MTN to buy Orascom so it can be present here."
The delegation is in Algeria to discuss possible bilateral trade agreements, including: discussions around nuclear energy; a deal signed between SA's Petroleum Oil and Gas Corporation and Algeria's Sonatrach Petroleum Corporation; and a possible programme of action in the sporting arena.
International relations and co-operation minister Maite Nkoana-Mashabane is also in Algeria, and called on businesses across the continent to step up business deals in Africa. “More business contact across the continent has to be enhanced by establishing a deliberate programme for the development of infrastructure,” she said.
MTN will be pleased that it finally has government backing on a large deal, like the one it is negotiating with Orascom.
Orascom's operation in Algeria, Djezzy, is one of the prizes MTN had set its sights on when it entered into talks with the Egyptian-based business.
However, Algerian officials in the country's telecommunications ministry are opposed to the possible sale of the country's largest mobile operator. Orascom holds a 49.6% majority stake in Djezzy, which services just under 15 million subscribers.
Algeria's laws allow it to veto any possible sale offer on the table, and its stern refusal to accept the deal could see the mobile business nationalised.
Bad relations between Egypt and Algeria have been blamed as the reason Algeria is not happy to allow Orascom to sell the business. However, with trade talks under way, the South African government may well convince Algeria's officials to smooth over the deal.
Djezzy is Orascom's top performer in its stable of telecoms operations, which exploded to a 67% market share in the country since its commercial opening in 2002. The company was the first mobile business to be granted a licence to provide services, followed by Kuwait's Wataniya Telecom.
MTN is keen to get its hands on the Algerian business, and analysts have said it would only take on the smaller operations like Central African Republic and Namibia if it could take up the true prize of Algeria.
The JSE-listed business issued a cautionary on 23 April, and later that week added that the discussions were with Orascom. Analysts say that without Djezzy in the Orascom stable, MTN is likely to walk away from the deal with the Egyptian operator.
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