VimpelCom

Telenor: Russian battle edges towards resolution (possibily)

Paul Rasmussen — Fri, 26 Jun 2009 12:09:07 -0400

Agreement might be in the cards between Telenor and Alfa Group following news from insiders that the two companies are again considering merging VimpelCom and Ukraine's Kyivstar. The long-running feud between Telenor and Alfa was becoming increasingly fraught with Telenor's shares in VimpelCom being seized by a Russian bailiff after numerous legal battles.

Leaked information would indicate Alfa's telecoms arm, Altimo and Telenor would each receive a 40 per cent holding of the merged company, with the additional shares going to various VimpelCom minority shareholders. However, Telenor has apparently signalled that any merger would still need many issues to be resolved before the company could commit.

However, in another twist to this already tangled saga, it would appear likely the co-investors could form a joint venture registered in the US in which they would pool their stakes: Telenor's 29.9 per cent in VimpelCom, its 56.5 per cent of Kyivstar, and Alfa's 44 per cent of VimpelCom and 43.5 per cent of Kyivstar.

This approach would apparently lead to neither Telenor or Alfa controlling the joint venture. Given the complicated history between these two firms, this solution could provoke dissatisfaction in the future with either company looking to expand its influence.

For more on the story:
Cellular News

Telenor scoops Scandinavian iPhone deal, but is hit with US$1.7bn fine

Paul Rasmussen — Fri, 20 Feb 2009 13:14:06 -0500

The Norwegian-based operator Telenor has won a deal to bring Apple's iPhone to Sweden, Denmark and Norway in the next few months. The company, which has significant mobile properties in Asia and is ranked seventh in the world, said more details would be available shortly. No mention was made as to whether this distribution deal had any exclusivity attached to it.

This news came as the company said it would appeal against a ruling in a Siberian court that it must pay US$1.7 billion in damages in a case brought by a fellow shareholder in the Russian operator VimpelCom. This ruling is the latest in a long series of struggles by Telenor to protect its near 30 per cent holding in the company, Russia's second-largest mobile operator. The case, brought by the obscure British Virgin Islands company Fairmex with just a 0.002 per cent share holding in VimpelCom, alleges Telenor's nominees on the VimpelCom board delayed the company's acquisition of the loss-making Ukrainian mobile operator Ukrainian Radio Systems, thereby costing it billions in lost revenues.

Currently, despite investments made by VimpelCom in excess of US$600 million, URS continues to make losses and, as of the end of last year, had less than 5 per cent market share.

For more on this story:
Macworld and Cellular News

From Russia with concern - where next for MTS and VimpelCom?

Paul Rasmussen — Fri, 07 Nov 2008 13:09:18 -0500

Russia's two largest MNOs took giant steps in October to reposition themselves in Russia and the CIS region. For MTS, a strategic partnership with Vodafone followed a two-phase attempt to place 20 billion roubles in bonds. VimpelCom has also sought to raise funds and has scooped a 49.9 per cent stake in Russia's largest mobile handset retailer. However, despite these concerted attempts to reposition themselves, the effect of the global economic downturn and political exigencies could wreak havoc. For MTS and VimpelCom, the Russian mobile market is fast maturing. Mobile penetration is running about 130% and Ovum forecasts that it will exceed 150% by 2013. Speculation is rife that either of them could even expand beyond their regional Eurasian footprint to target markets in Africa and Asia. Article

Russian court freezes Vimpelcom shares

Paul Rasmussen — Wed, 29 Oct 2008 12:56:22 -0400

Norwegian mobile operator Telenor received a major shock this week when it discovered, via a press release, that a Siberian appeals court had ordered the 'arrest' of its 29.9 per cent shareholding in Russia's second biggest mobile operator Vimpelcom. The court in Omsk froze the shares following a lawsuit by a Vimpelcom minority shareholder, the British Virgin Islands-registered Farimex. In addition to freezing Telenor's shares in Vimpelcom, the court also arrested the 44 per cent stake of fellow shareholder Altimo, the telecoms arm of Mikhail Fridman's Alfa Group.

There have been problems at Vimpelcom for some months. In April Farimex filed a suit claiming damages against Telenor for holding back Vimpelcom's planned expansion into the Ukraine. The court found Telenor to be at fault and awarded US$2.8 billion in damages. This decision is being appealed by Telenor, who says the ruling is absurd and without merit, and a hearing is due in November.

This move by Farimex seems to be linked with Altimo's ongoing discussions with the Deutsche Bank. Altimo pledged its Vimpelcom holding as collateral for US$2 billion worth of bonds issued by Eco Telecom but when the Vimpelcom share price fell heavily Altimo had to institute restructuring negotiations with the Deutsche Bank. Jan Edvard Thygesen, EVP and head of Telenor's operations in Central and Eastern Europe commented, "We see absolutely no reason for the Omsk court to arrest Telenor's VimpelCom shares ahead of the scheduled appeals hearing, The timing of the arrest and the inclusion of Altimo's shares strongly suggests that there were other motives for this arrest, and we believe this is yet another of Alfa's collusive actions. There are already media reports that this is meant to prevent Alfa's creditors from getting access to Alfa's shares. If that is the case, it could limit other Russian companies' ability to obtain loans from international banks for many years to come. We feel confident that Russian authorities will look into the matter immediately."

For more:
- read these Cellular News and the Financial Times articles

Related article:
VimpelCom to acquire rest of Corbina Telecom