March 19, 2009 / 3:05 AM / 10 years ago

WRAPUP 1-Telenor confident as Alfa bows to U.S. court

* Telenor believes will eventually win Farimex case

* Says still worried its Vimpelcom shares could be sold

* Says a separation from Alfa Group still the best solution

* Alfa moves on U.S. court demand to pare Turkcell stake

(Adds details, quotes, background, share price)

By Aasa Christine Stoltz and Thomas Grove

OSLO/ISTANBUL, March 18 (Reuters) - Norway’s Telenor (TEL.OL) voiced renewed confidence it would eventually win a legal dispute affecting its stake in Russia’s Vimpelcom VIP.N as its adversary Alfa moved to comply with a U.S. court ruling.

“We have a sound belief that we will manage to see this Farimex case through the legal systems and that the case will be dismissed,” Jan Edvard Thygesen, Telenor’s Central and East European chief, told reporters.

Thygesen spoke after Ukrainian-born billionaire Mikhail Fridman’s Alfa Group announced it had reduced its stake in Turkish operator Turkcell (TCELL.IS) in line with a November ruling by a U.S. court in a competition suit filed by Telenor.[nLI938170]

A U.S. judge held Alfa, Telenor’s partner in Russia’s No. 2 mobile operator Vimpelcom, in contempt of court last week for failing to comply with the ruling.

The same day, Telenor’s strategic stake in Vimpelcom was seized by a Russian bailiff on orders from a Siberian court which ruled against Telenor and in favour of Farimex, a tiny owner of Vimpelcom stock. [nLD932883]

Alfa says it has no connection to Farimex. ALFA RHETORIC COOLS

The announcements came a day after Alfa cooled its rhetoric in another simmering corporate conflict, this time with aluminium tycoon Oleg Deripaska. They issued a joint statement saying they would solve a debt dispute through dialogue. [nLH184187]

Fridman’s Alfa Bank is pursuing Deripaska’s Basic Element, currently in negotiations with a creditors club, over several billion dollars of debt owed by his company RUSAL.

Alfa reduced its stake in Turkcell to 4.99 percent, handing control of its Turkish vehicle to fellow Russian tycoon Alexander Mamut and an affiliate of the Kazakh Visor Group at “a very serious discount,” Kirill Babayev, senior vice president at Alfa telecoms arm Altimo, said.

Asked about Alfa Group’s reduction of its Turkcell stake, Telenor said it was “nice” if they had decided to comply with the ruling, but that there were several elements of the order that would have to be fulfilled.

Analysts say that the dispute over strategy at Vimpelcom, in particular in Ukraine, where Telenor controls the largest operator Kyivstar and Alfa has a minority stake, will end with a swap of Alfa’s stake in Kyivstar for Telenor’s Vimpelcom stake.

Thygesen said a separation from Vimpelcom co-owner Alfa Group would be the best solution, but would be hard to achieve at the moment.

The seizure of Telenor’s Vimpelcom stock — 29.9 percent of the voting shares and 33.6 percent of the common stock — raised the prospect that the shares could be sold by court order.

Alfa owns 44.0 percent of the voting shares and 37.0 percent of the common stock.

“We believe that we will manage to get this (case) through the system all the way to the top, but we do feel a worry that an accident could happen on the way,” Thygesen said, adding that by “an accident” he meant that Telenor’s shares in Vimpelcom would be sold.

Shares in Telenor traded down 1.14 percent at 34.75 crowns, against a 1.78 percent drop in the Oslo bourse’s benchmark index .OSEBX. Vimpelcom shares rose 2.5 percent in New York, though Moscow markets fell more than 2 percent.

“Our base case scenario for now is a protracted legal battle with no outright interference from the Kremlin,” analysts at Russian investment bank VTB Capital wrote in a note on the conflict. “In our view, the risk of Telenor losing its stake is quite low.”

(Writing by Melissa Akin in Moscow; Editing by Rupert Winchester)

((melissa.akin@reuters.com; +7 495 775 1242)) Keywords: TELENOR ALFA/

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