Telenor and Russian partner Alfa have struck a deal aimed at settling their acrimonious and long-running dispute over Vimpelcom.
The two companies said yesterday
they would combine their investments in Russian operator Vimpelcom and Ukranian cellco Kyivstar into a single company.
The settlement comes a week after Telenor CEO Jon Frederik Baksass met Russian PM Vladimir Putin during a business lunch in Moscow.
However, Telenor warned that the deal would succeed only if conditions were met, including the ending of a lawsuit brought by minority shareholder Farimex.
A Siberian court has ordered the seizure of Telenor’s stake in Vimpelcom as a result of the court case from the shadowy British Virgin Islands-based company. Farimex has accused Telenor of blocking Vimpelcom’s expansion into the Ukraine because of its majority ownership of Kyivstar.
Telenor says it opposed the acquisition of Ukraine operator URS because of the price and the lack of transparency surrounding the deal. It believes Farimex is connected to Alfa, but Alfa has denied any relationship with the firm.
The deal will also need the approval of at least 95% of OJSC Vimpelcom ADR holders and some creditors.
Telenor currently owns 33.6% of publicly-listed Vimpelcom and 56.5% of Kyivstar. Altimo, Alfa’s telecom arm, owns 43.5% of Kyivstar.
Under a complex deal, Telenor will own 38.8% of the new company and enjoy 35.4% voting rights, while Altimo will own 38.46%, with 43.9% voting rights. Each will contribute three members to the nine-member board, with three independents.
They aim to list Vimpelcom Ltd on NYSE by the end of March 2010 and delist OJSC Vimpelcom in April.
The company will offer service in Ukraine, Georgia, Vietnam, Cambodia and Laos and will seek to expand in other emerging markets.
Baksass said the deal meant the end of a “a five-year struggle” and the chance to “put all previous disagreements behind us.”