Norway’s Telenor (OSE:TEL) aims to sell its entire 33% stake in Russian telco VimpelCom (NASDAQ:VIP), marking the second planned withdrawal by a Nordic telco from Eurasia in recent weeks.
Norway’s Telenor (OSE:TEL) aims to sell its entire 33% stake in Russian telco VimpelCom (NASDAQ:VIP), marking the second planned withdrawal by a Nordic telco from Eurasia in recent weeks.
The Oslo-based telco said in a statement that its “challenging” investment in VimpelCom has contributed less and less to the value of the group, while its core operations are growing. According to the company, its VimpelCom stake has a market value of about NOK20bn (US$2.38bn) – some 8% of its own market capitalisation.
Last month, Sweden’s TeliaSonera revealed that it had begun a process to exit its seven Eurasian markets: Uzbekistan, Azerbaijan, Georgia, Kazakhstan, Moldova, Nepal and Tajikstan.
Both TeliaSonera and VimpelCom have courted controversy in Uzbekistan. Together with Russia’s MTS, which also has operations in the country, they have come under investigation by authorities in Europe and the US in connection with alleged bribery.
Telenor said it would consider all options to divest the shares, noting that the process is likely to take “some time”.
Telenor chairman Svein Aaser said the planned exit is in the best interests of shareholders and in line with its long-term strategic focus.
“The VimpelCom asset, where Telenor holds a minority position without the possibility to fully control the company, has been challenging,” he acknowledged.
Telenor and VimpelCom’s other major shareholder – oligarch Mikhail Fridman’s Alfa Group – have had a long-running dispute over ownership and strategy.
Telenor CEO Sigve Brekke (pictured) commented that the company will “continue to focus on value creation in our core operations”.
Amsterdam-based VimpelCom acknowledged Telenor’s planned exit in its own statement.
“Telenor has been a longstanding and highly supportive shareholder for many years, helping to build our business. As VimpelCom moves forward with its recently announced new business strategy, we will work with Telenor to ensure a successful divestiture of their stake.”
