TeliaSonera, IPOC, TCI Unite Behind MegaFon Holder Pact"

STOCKHOLM -(Dow Jones)- Swedish telecom operator TeliaSonera AB (TLSN.SK) Wednesday said it, TelecomInvest and International Growth Fund Limited, the other two main holders of Russian mobile operator MegaFon (MGF.YY), have signed a pact to strengthen their relationship and clarify the governance and operations of MegaFon.

TeliaSonera said it, TelecomInvest, or TCI, and International Growth Fund Limited, or IPOC, will reinforce their commitment to the existing legally binding shareholders' agreement, which governs the relationship among the parties and guarantees the independence of MegaFon.

In particular, TeliaSonera said the shareholders' agreement specifically prevents a direct or indirect competitor, such as the Alfa Group, from holding a stake in MegaFon.

Therefore, TeliaSonera said that for the common good of MegaFon, the parties will work to resolve the ongoing dispute regarding Alfa's claim of ownership in MegaFon. In acknowledging the validity and binding effect of the existing MegaFon shareholders' agreement, the parties deplore the efforts of the Alfa Group to challenge this shareholders' agreement through claims made in the court of Khanti-Mansisk, Siberia, TeliaSonera said.

It said the shareholders are calling on Alfa to withdraw this action.

TeliaSonera, TCI and IPOC will actively work towards a public listing of MegaFon once the dispute with the Alfa Group is resolved.

Given the common position of the shareholders, and in order to provide MegaFon with increased stability, IPOC and TCI are withdrawing claims against TeliaSonera, which are currently subject to arbitration proceedings in Stockholm.

TeliaSonera said it will increase its contribution to the operational development of MegaFon by appointing an officer within MegaFon.

This position will ensure that MegaFon continues to benefit from TeliaSonera's expertise and knowledge in the telecommunications business and services development, the company said.

"Our agreement on certain basic principles and the support for the shareholders' agreement is important for MegaFon's stability and its day-to-day operations. We believe the public listing of MegaFon is the right way forward for TeliaSonera shareholders to maximize the value of the holding," said TeliaSonera President and Chief Executive Officer Anders Igel.

Jeff Galmond, beneficial owner of IPOC Capital Partners, said: "Today's agreement takes us a step closer towards ensuring that MegaFon's management and shareholders remain entirely focused on the business of building a strong and competitive force in the Russian mobile telecommunications market."

"MegaFon's shareholders are united behind the existing shareholders' agreement, which prohibits competitors from purchasing a stake in MegaFon. It is time that Alfa accepts the unequivocal validity of existing shareholder's agreements," Galmond said.

(END) Dow Jones Newswires"

Posted to the site on 9th March 2005