Proposal to Swap Turkcell Stake with Telekom Austria

MOSCOW, July 21 (Prime-Tass) -- London-based Pamplona Capital Management investment company has sent a letter to Altimo, the telecommunications arm of Russia's Alfa Group, proposing Altimo swap its stakes in VimpelCom and Turkcell for a non-controlling stake in Telekom Austria, Biznes business daily reported Friday.

The investment company said that Altimo would have to increase its stakes in the two companies in order for a deal to go through.

"For a stake of 59.5% in VimpelCom and 50.3% in Turkcell, Altimo might get 35.3% in the expanded capital of Telekom Austria," the investment company said, the daily reported.

A spokesperson with Altimo said that the suggestion was unrealistic, adding that Pamplona, headed by a former top manager of Alfa Bank, the key unit of Alfa Group, was not Altimo's investment consultancy.

"At the moment these ideas have nothing in common with reality," Altimo's Senior Vice President Oleg Malis said, the daily reported.

Currently, Altimo controls a 32.9% voting stake in Russia?s second largest mobile operator VimpelCom and indirectly controls a 13.22% stake in Turkey's largest mobile operator Turkcell.

Analysts surveyed by the daily also reacted to the proposal with skepticism.

Meanwhile, Alfa Group's head Mikhail Fridman earlier said that Alfa Group was looking to swap its telecommunications assets for a stake "in a single Western company."

Telekom Austria is 25.4%-controlled by Austria's industrial holding OeIAG.

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Posted to the site on 21st July 2006