October 5, 2015 / 5:50 AM / 5 years ago

UPDATE 3-Norway's Telenor puts $2.3 bln Vimpelcom stake up for sale

* Telenor seeks to sell 33 pct stake in Vimpelcom

* Books $896 mln impairment in Q3

* No talks yet with possible buyers

* Telenor shares up 3.2 pct vs 2.7 pct rise in Norwegian index (Rewrites first paragraph, adds detail, analyst comment, updates shares)

By Gwladys Fouche and Ole Petter Skonnord

OSLO, Oct 5 (Reuters) - Norwegian telecoms firm Telenor has put up for sale its 33 percent stake in Vimpelcom , valued at $2.3 billion, after its recently appointed chief executive opted to exit an investment riven by ownership disputes.

Telenor has long been in open conflict with Vimpelcom’s other major shareholder, Russian billionaire Mikhail Fridman, over control of the company and its strategy, to the point where it became a diplomatic issue between Oslo and Moscow.

“As the new chief executive I was asked to hold a review of our strategic positions,” Telenor CEO Sigve Brekke told Reuters. “We concluded that we’re no longer served by holding a minority position in Vimpelcom.”

Vimpelcom also faces scrutiny from authorities in the United States and the Netherlands over allegations of paying bribes to access the Uzbek market. Last December Telenor’s then CEO Jon Fredrik Baksaas stepped down from the Vimpelcom board after it emerged Vimpelcom was under investigation.

Brekke took over as CEO from Baksaas less than two months ago after leading Telenor’s fast-growing operations in Asia.

It was under Baksaas that Telenor bought into Vimpelcom and grew its stake to 33 percent and 43 percent of voting rights. Fridman’s LetterOne fund has 47.9 percent of voting rights.

LetterOne declined comment on Telenor’s decision. Vimpelcom said it was aware of Telenor’s intention to sell and would work with Telenor to ensure a successful divestiture.

Telenor said it would book a non-cash impairment of about 7.5 billion crowns ($897 million) in the third quarter as a result of the planned selloff. It said it would explore all options to divest the stake, though no timeframe had been set.

“We now wish to use our energy and financial resources to focus on our core markets. That’s our 13 markets in Asia, the Nordics and in central-eastern Europe,” said Brekke, adding there had been no contact yet with possible buyers.

Telenor shares rose 3.2 percent by 1120 GMT, versus a 2.7 percent rise in the Norwegian benchmark index.

Some analysts said the sale proceeds could fund a special dividend. “It’s positive that they want to sell the Vimpelcom stake, it raises the likelihood of increased dividends from Telenor, but it’s not such a great time to sell,” Swedbank analyst Stefan Ward said.

Vimpelcom shares have lost 72 percent of their value in the past five years, but Telenor argued it had still made a good long-term return on its investments, which began some 17 years ago in the Russian and Ukrainian companies that eventually became part of the enlarged Vimpelcom.

“We’ve seen an annual return on investment of more than 18 percent,” Brekke said.

$1 = 8.3618 Norwegian crowns Additional reporting by Maria Kiselyova in Moscow; Editing by Keith Weir and David Holmes

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