Daniel Walsh Quoted on Algerian Deal in Legal Business Morocco/Algeria Roundtable
Legal Business assembled partners who handle a significant amount of work in Africa at firms ranked by the publication’s Global 100 and Legal Business 100 surveys to discuss “the practicalities of servicing clients in Algeria and Morocco.”
Akin Gump London-based cross-border transactions partner Daniel Walsh, who co-led the team advising client VimpelCom on the sale of its 51 percent stake in Orascom Telecom Algérie to Algeria’s Fonds National d’Investissement, said, in response to an earlier remark at the roundtable, “I am not sure economics trumps politics. We found the politics, from an outsider’s view, to be very complicated.”
Continuing, he discussed the unique nature of the deal structure, saying, “What we did there was because of the law that a foreign investor cannot control a majority stake in an Algerian company, which makes it difficult for companies to come in and invest money. In our case—I do not know if this becomes a paradigm or not—although we only own 46.5 percent, we structured the transaction through a shareholders’ agreement to keep control of the company, so my client is able to consolidate that investment now. I am not sure that had been done previously in Algeria or has been done since, because it took us a number of years to get everybody comfortable with the fact that, although the Algerian National Investment Fund would own 51 percent, they would not have majority of the board and actually control the company. They have significant influence, of course, through veto rights, but at the end of the day we consolidated.”
Regarding the importance of firms teaming up in certain jurisdictions to provide comprehensive service, Walsh said, “Egypt is a perfect example of that. When my client goes into Egypt, it often uses two firms. One firm has the connection but has a small staff and really cannot do the nuts-and-bolts corporate work. The other firm has the technicians. In the three or four transactions they have done successfully, they have hired both: one to open the doors and the other one to make sure the laws are complied with.”
On the topic of North Africa as a forum for resolving disputes, he noted, “If you were acting for a non-Algerian investor you would not advise your client to agree to a contract that had Algerian law arbitration. It is not at that stage yet for arbitration. The preference will be French or English law, in my experience. I do not see that changing.”
Following on that, regarding the possibility that local arbitration centers might be less expensive, he said, “If you are going to lose, it does not matter how cheap it is.”
Akin Gump’s work on VimpelCom’s OTA deal has been recognized by Financial Times in its 2015 FT Europe Innovative Lawyers competition (learn more here), by The American Lawyer in its Global Legal Awards (learn more here) and by TMT Finance as its TMT Deal of the Year (learn more here).
To read more about Akin Gump’s work on VimpelCom’s OTA deal, please click here.