Alfa eyes US$1bn-plus deals in Europe

Russian businessman Mikhail Fridman’s Alfa Group is looking at telecoms deals of US$1bn or more, primarily in Europe, according to the CEO of its telecoms investment arm Altimo.
Alexey Reznikovich said the company is also eyeing deals in the US in…

Russian businessman Mikhail Fridman’s Alfa Group is looking at telecoms deals of US$1bn or more, primarily in Europe, according to the CEO of its telecoms investment arm Altimo.

Alexey Reznikovich said the company is also eyeing deals in the US in associated sectors, such as data centres, worth US$20m to US$200m, according to media reports from Moscow.

Reznikovich said the company is interested in up to five potential targets in Europe but did not name them, The Moscow Times reported. The CEO noted that the company thinks it is the right time to invest in Europe as consolidation processes are gaining traction, but added that it is also looking at Russia and Southeast Asia. Targets with significant debt may present opportunities, he said, as their equity typically trades cheaply.

However, Reznikovich expressed concern that tensions between Russia and the West could cause the company regulatory headaches in Europe.

Alfa, which raised US$14bn from the sale of its stake in oil company TNK-BP last year, is already invested in Russian telco VimpelCom and Turkish mobile operator Turkcell.

Turkcell dispute

Reznikovich was quoted by Reuters as saying the corporate governance issues at Turkcell are likely to continue if Cukurova manages to recover the stake. He said matters would be resolved if the Turkish company exits its investment in the Turkish carrier.

Turkcell’s three major shareholders, which also include Sweden’s TeliaSonera and Turkey’s Cukurova Group, have been embroiled in ownership and corporate governance disputes for several years which have prevented the company from convening an AGM and paying dividends. The UK’s Privy Council has given Cukurova until 24 June to pay Altimo US1.6bn to recover a controlling stake in Turkcell, however analysts have questioned whether the Turkish group will be able to meet the deadline.

Altimo seized the stake after Cukurova defaulted on a 2005 loan agreement, for which the shares had been pledged as collateral.

Reznikovich reportedly noted that Alfa will remain invested in the Turkish market as long as it presents development opportunities. He declined to comment on future development possibilities for Turkcell.