Russian Telecoms Min Backs Telenor Move To End Alfa Row

MOSCOW -(Dow Jones)- Russia's Telecommunications Minister, Leonid Reiman, Thursday said he supports Telenor's latest attempt to end a dispute with financial holding Alfa Group Russia over their joint control of wireless operator Vimpel Communications.

Under the Norwegian company's proposal, Telenor and Alfa - the largest shareholders in VimpelCom - would agree a deal allowing one partner to buy out the other. Telenor has applied to Russia's Federal Antimonopoly Service, or FAS, for permission to buy all of VimpelCom.

"It is not the worst suggestion for Telenor to buy 100% of VimpelCom," Reiman said at a meeting with foreign journalists. "The earlier this conflict is resolved, the better for the whole industry."

Telenor and Alfa have been in dispute over VimpelCom's plans to enter the booming Ukrainian mobile market, a row that has sparked a battle for control of Russia's second-biggest wireless operator.

The Norwegian company last year tried to block VimpelCom's acquisition of URS, one of the smaller players in Ukraine. Alfa and minority shareholders backed the deal.

Reiman said Telenor acted wrongly in trying to block the URS acquisition because it had the support of a wide shareholder base.

He also criticized Telenor and Alfa for their public row. "It is something that they could have solved amongst themselves without involving the press so much," he said.

Telenor proposed Monday that VimpelCom buy Ukranian wireless operator Kyivstar - owned by Telenor and Alfa - for $5 billion in cash, rather than an all-stock deal proposed by VimpelCom last month. Alfa supported the idea.

However, a key condition of the plan is that Telenor and Alfa agree the company that puts the highest value on VimpelCom would buy out the other to end their dispute. Alfa has said it won't accept that condition.

Company Web site: http://www.telenor.com

-By Anna Galitsina-Ivanova, Dow Jones Newswires; +74 9596 97832; anna.galitsina@dowjones.com

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Posted to the site on 23rd March 2006