* Orascom shares up 5 percent, Vimpelcom down 0.76 percent (Adds analyst comment, detail, background)
By Hamid Ould Ahmed and John Bowker
ALGIERS/MOSCOW, Oct 5 (Reuters) - Algeria still plans tonationalise Orascom Telecom's local unit, underminingVimpelcom's $6.6 billion acquisition deal ahead of the Russianpresident's visit to the country on Wednesday.
Russian billionaire Mikhail Fridman's Alfa-Group andNorway's Telenor have agreed to combine Vimpelcom with theassets of Naguib Sawiris, once Africa's richest man, to createthe world's fifth-largest mobile telecom company.
Outspoken Egyptian Sawiris is selling his empire, built byentering markets where other operators hesitated to tread, toenter less risky domains and help reduce debt.
Orascom's investment in Algeria, which accounts for almost50 percent of the group's revenues, is the subject of a row withAlgiers over hundreds of millions of dollars in back tax claims.
"Any change in the shareholding of Orascom Telecom Holding(OTH) does not undermine commitments already made to giveOrascom Telecom Algeria (OTA) to the Algerian state," MohamedBenmeradi, the Algerian Industry and Investment PromotionMinister, told the APS official news agency on Tuesday.
He said Djezzy was not involved in the negotiations betweenVimpelcom and Orascom and that Algeria was ready to acquire theunit.
Vimpelcom CEO Alexander Izosimov said he was keen to hang onto Djezzy and would travel to Algeria with Russia's PresidentDmitry Medvedev.
Analysts said the future of Djezzy was likely to be high onthe agenda.
"The presence of Medvedev is not exactly a coincidence. Nowa deal has been announced, he can raise the issue of Djezzy.That Russia and Algeria both have oil and gas assets is helpful-- a common ground can be found," said Elena Mills, senioranalyst at Alfa Bank.
She added that Vimpelcom believed there was legal basis toappeal if Algeria took Djezzy.
"There is a clear path for international arbitration," shesaid.
At 1402 GMT Orascom shares were up 5 percent at 5.45Egyptian pounds, while Vimpelcom shares in New York were down0.76 percent $14.29. (Writing by Victoria Howley; Editing by Will Waterman)