Telenor: Russian battle edges towards resolution (possibily)

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

Related news:
The latest on Telenor's legal battles
Telenor scoops Scandinavian iPhone deal, but is hit with US$1.7bn fine
Russian court freezes Vimpelcom shares
Telenor confirmed as bidder for Indian mobile operator

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