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.

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Cellular News

The latest on Telenor's legal battles

Paul Rasmussen — Fri, 21 Nov 2008 12:58:26 -0500

The ongoing legal rows over Telenor's mobile investments in Eastern Europe saw some new twists this week. In the US, a Federal Court judge ruled that Russian conglomerate Alfa Group was in contempt of court for failing to sell its stake in Ukrainian mobile operator Kyivstar. Telenor, which owns 56.5 per cent of Kyivstar, has had a long running dispute with Alfa, whose subsidiary Altimo owns the remaining shares. The Federal judge ordered Alfa subsidiaries Altimo, Alpren, Hardlake and Storm to sell their Kyivstar shares within 90 days or face heavy financial penalties. Alfa was also ordered to lower its stakes in Turkish operator Turkcell and Ukrainian High Technologies to less than 5 per cent in the same timescale. Earlier this week, a court in Omsk, Siberia postponed the hearing of Telenor's appeal against the US$2.8 billion judgement passed against it until December 12^th. Jan Edvard Thygesen, executive VP and head of Telenor's Central and Eastern European operations described the case as ‘a judicial farce'.

For more on this story go to Cellular News and Unstrung

Related article:
Russian court freezes Vimpelcom shares