Both Norway’s Telenor and Russia’s Altimo have raised their stakes in VimpelCom in a development that suggests their long-running dispute over the Amsterdam-based, New York-listed telecoms group may be nearing a resolution.
Altimo, the telecoms…
Both Norway’s Telenor and Russia’s Altimo have raised their stakes in VimpelCom in a development that suggests their long-running dispute over the Amsterdam-based, New York-listed telecoms group may be nearing a resolution.
Altimo, the telecoms investment arm of Mikhail Fridman’s Alfa Group, announced late yesterday (15 August) that it has bought 305 million shares of VimpelCom common stock equalling a 14.8% voting stake from Egyptian investor Naguib Sawiris’ Weather Investments II for US$3.6bn. As a result of this deal and additional market purchases, Altimo has raised its voting stake in VimpelCom from 25% to 40.5% and TelecomFinance understands it may consider increasing it further.
Meanwhile, Norwegian telco Telenor issued a statement today saying Weather has exercised a put option to sell 71 million VimpelCom preferred shares to the company for US$113.6m. As such, Telenor’s voting stake in VimpelCom rises from 39.5% to 43%. Yesterday was the first day Weather could exercise the option to sell the remaining preferred shares to Telenor under the terms of a 15 February agreement.
Altimo said it has agreed to withdraw its earlier contention that Telenor and Weather violated VimpelCom bye-laws when, after the former bought 234 million VimpelCom shares from the latter in February, they did not hold a mandatory tender offer for outstanding shares.
Commenting on the developments, Altimo vice president Evgeny Dumalkin said the firm’s share purchase agreement with Weather aligns with its “strategic and long-term interests” in VimpelCom.
“We are strong believers in [the] significant investment potential of VimpelCom,” he said.
State of FAS investigation unclear
Russia’s Federal Antimonopoly Service (FAS) filed a claim against Telenor’s February stake increase in Vimpelcom with the Moscow Arbitration Court earlier this year and, at the time of publication, it was unclear whether or not this would be pursued.
Earlier this month, the FAS said it had approved proposals by Russia’s Government Commission on Foreign Investments in Strategic Companies to resolve the dispute, provided certain conditions are met. These included a requirement that the head of VimpelCom’s Russian unit be a Russian citizen – which is already the case.
The FAS said at the time it would submit a final proposal to Telenor shortly, noting the government is keen to see the matter resolved as soon as possible.
Telenor was not immediately available for comment today, but a Bloomberg report quoted a company spokesperson as saying the company believes Altimo’s stake increase would “necessarily” put an end to the FAS claim as it shows it is “completely groundless”.
Consequences for VimpelCom listing?
News of the stake increases follows media speculation that VimpelCom has postponed its decision to list in Europe until the dispute between its two main shareholders is resolved.
A VimpelCom spokesperson today declined to comment on shareholder matters but said the company is likely to make a decision on the listing toward the end of the year, emphasising that a range of factors – not merely shareholder relations – need to be taken into account.
VimpelCom yesterday reported net profits of US$488m, up 108% from the previous year, driven by cost-cutting in Italy, the sale of its 49% stake in Vietnam’s Gtel Mobile and an increase in subscribers in Asia and Africa. Revenues in the second quarter of 2012 rose 4% year-on-year to US$5.7bn, while EBITDA was up 10% to US$2.5bn.
