Altimo buys more Vimpelcom shares to overtake Telenor

MOSCOW Tue Oct 30, 2012 8:00am EDT

Mikhail Fridman speaks during his news conference in Moscow, June 16, 2008.REUTERS/Sergei Karpukhin

Mikhail Fridman speaks during his news conference in Moscow, June 16, 2008.

Credit: Reuters/Sergei Karpukhin

Related Topics

MOSCOW (Reuters) - Billionaire Mikhail Fridman's Altimo increased its stake in Russian telecoms group Vimpelcom VIP.N overnight, outmaneuvering arch-rival Telenor (TEL.OL) and potentially settling a decade-old feud between the two.

Altimo and Telenor have bickered over Vimpelcom's strategy and control for the past ten years, culminating in May when Russia's anti-monopoly regulator stepped in with a lawsuit contesting the Norwegian group's dominant position and suspending dividends payouts.

The Russian tycoon's investment vehicle's acquisition overnight of 123.6 million shares, or near 6 percent, from Ukrainian businessman Viktor Pinchuk's Bertofan vehicle, raises its voting rights to 47.85 percent from 41.85 percent.

Telenor holds a 43 percent stake.

"We hope that this deal will remove the question of foreign shareholder control in Vimpelcom and will be a key in solving the conflict between (Russia's regulator) and Telenor," said Altimo.

"The deal will... restore normal corporate governance, increase debt servicing efficiency and allow the payment of dividends."

Telenor, however, was unimpressed with the transaction confirmed by Vimpelcom overnight.

"For us this (deal) is not great news," said Telenor spokesman Dag Melgaard. "Our proposition was that we should split these shares in a way that made our respective stakes in Vimpelcom equal."

DIVIDEND SUSPENDED

An injunction in May banned payouts by Vimpelcom's Russian unit to its Netherlands-registered parent company. As a result, Vimpelcom postponed the payment of final 2011 dividends.

Since Telenor is no longer the dominant shareholder, there are no grounds for the lawsuit to remain in place.

The regulator has said it would consider dropping its lawsuit if the two shareholders resolved their differences, with equal ownership seen as one of the key conditions for the truce.

The regulator was not immediately available for comment.

Telenor proposed earlier this month that it and Altimo should jointly buy the Bertofan's stake in a way that would give the two an equal ownership. Telenor has argued that the Bertofan shares should in reality be counted in with Altimo's holding.

"We have regarded these shares as being in Altimo's control all along, so this underlines what we have said before. Now these shares formally belong to them," Melgaard said.

"Now they bought these shares themselves, so it is a bit uncertain what this means compared to the proposal we made," he added.

Vimpelcom's Russian unit is the country's no.3 mobile phone operator controlling one quarter of the market, and is considered by the Russian government a strategic asset. (Reporting by Maria Kiselyova; Additional reporting by Joachim Dagenborg in Oslo; editing by Megan Davies and Mike Nesbit)

FILED UNDER: