Svyazinvest not eyeing Telenor Vimpelcom stake

Svyazinvest chairman Leonid Reiman talks to Reuters in Moscow September 15, 2009.

MOSCOW (Reuters) - Russian state-run telecom holding company Svyazinvest wants to expand in mobile but will not do it by buying Norway-based Telenor's (TEL.OL) shares in Vimpelcom (VIP.N) if they are put up for forced sale.

Telenor faces the prospect of losing its stake in Vimpelcom after Russian bailiffs in June ordered the sale of its shares to cover the fine that a Siberian court imposed for holding back Vimpelcom's expansion in Ukraine.

Leonid Reiman, chairman of the state-controlled telecoms holding company Svyazinvest, told Reuters in an interview that Svyazinvest would not participate in the auction but said he considered the controversial legal process had so far been fair.

"Svyazinvest is a strategic telecommunications operator rather than investor. As the stake... will target financial investors, I think it does not represent any big technological or strategic interest for Svyazinvest," Reiman said at the Reuters Russia Investment Summit.

Telenor views the case as an extension of a protracted dispute with Russian billionaire Mikhail Fridman. Fridman controls the powerful conglomerate Alfa Group, which is the other strategic investor in Vimpelcom, Russia's No.2 mobile operator after MTS (MBT.N).

The case is being closely watched as a guide to the climate for foreign investors in Russia, coming after the shareholder battle last year that forced management and personnel changes at BP's (BP.L) Russian oil joint venture, TNK-BP TNBPI.RTS.

Reiman, former telecoms minister and a modernizer of state telecoms, said the case should not scare away international investors from the Russian market if the decision is made in a transparent way.

"The Telenor case is a dispute between two companies and at the end of the day it comes to how the judgment of the court will be made, how transparently the procedure ... will continue and whether the results of this dispute... will satisfy international investors in terms of being reasonable."

"I hope that this will be the case and in this way there will be no reasons for the international investors to avoid coming and broadly participating in the development of the industry," Reiman said.

The case has become the most important bilateral issue between Oslo and Moscow, and Norway's Prime Minister Jens Stoltenberg met with his Russian counterpart, Vladimir Putin, and President Dmitry Medvedev in May to discuss the case.

However, Russia's government has said it would not interfere in the dispute unless it finds evidence of illegal actions by the Russian side.

Reiman said he currently saw no reason for the Russian government to intervene in the dispute.

"If there is a reason to believe that the hearing in the court and the judgment are not carried out in a proper way, then I think there is a reason for the Kremlin to look at the situation, but till now I think that everything was done in quite an open way," he said.

"If the decision (to sell the stake) is made in the frame of existing legislation and will be well motivated and understandable for everybody I think it's fair enough."

The Russian government, which wants to play a bigger role in the telecoms sector, in May cleared the reorganization of Svyazinvest, which has been losing share on key markets to privately-owned players in recent years.

Russia's Communications Minister said in June the best route for developing Svyazinvest's mobile business would be a merger of its mobile assets with one of the top three wireless operators.

(Reporting by Chris Wickham, Anastasia Teterevleva, Maria Kiselyova, Melissa Akin, Robin Paxton; writing by Maria Kiselyova; editing by Chris Wickham)