VimpelCom Confirms CEO May Leave,But Downplays Reports"

MOSCOW -(Dow Jones)- Russian cellular operator Vimpel Communications, Wednesday confirmed press reports that Chief Executive Alexander Izosimov may leave following shareholder conflict, but tried to downplay it.

"He hasn't said anything new - all he said was that his contract runs out (on Oct. 1) and it will be clear later what happens next," Mikhail Umarov, spokesman for VimpelCom told Dow Jones Newswires.

Shareholders, Norway's Telenor and Russia's Alfa Group, have been in bitter conflict over VimpelCom's strategy in Ukraine and control over Kyivstar, another operator they co-own.

Several dailies reported Izosimov saying that if the conflict persists and shareholders don't provide strategic clarity for the company's development, he will leave.

Later, Izosimov said in a statement sent by his press department, that he may leave the company after his contract expires on Oct.1, but hasn't yet made a decision.

He said that he will make his final decision after the general shareholders' meeting, which will elect a new board. The next board meeting will take place June 23.

"If the board of directors proposes to extend the contract, the key parameter would be clarity on strategic development of the company," he said in a statement.

Kjell-Morten Jonsen, head of the representative office in Russia, said that it will be the board who will decide on whether or not to extend Izosimov's contract.

"Izosimov said that he may want to continue under certain conditions, which is fair," Jonsen said. "Clearly he has done a lot of good work, but we also disagree on some important points."

Earlier, Telenor filed documents with the Securities and Exchange Commission, saying that they may seek to replace VimpelCom's management.

Also, a person close to Telenor said that Telenor blamed Izosimov personally for a large part of its conflict with Alfa, as he pushed through the acquisition of Ukraine's URS by VimpelCom against Telenor's will, but with Alfa's support.

Telenor thought URS was too expensive for its size and even took Izosimov to court over legality of the deal.

Deputy Chief Executive at Altimo, Alfa's telecommunications arm, Kirill Babayev told Dow Jones Newswires that he wouldn't like to comment on the situation with Izosimov Wednesday, saying that Altimo will conduct a press conference on the matter on Thursday.

Babayev earlier told Russian newspapers Vedomosti Kommersant and Vedomosti that Altimo considered Izosimov as a highly-qualified manager who would be hard to replace.

Several analysts wrote in their notes that Izosimov's exit would be a big loss for the company and would hit its share price.

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

-By Anna Ivanova-Galitsina, Dow Jones Newswires; +7 495 974 80 55; anna.galitsina@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 7th June 2006