Sources Say VimpelCom in Talks to Buy Kyrgyz Operator from Alfa

MOSCOW, Oct 30 (Prime-Tass) -- Russia's second largest mobile operator VimpelCom is in talks to buy Kyrgyz GSM mobile operator Sky Mobile from one of its key shareholders, Altimo, telecommunications arm of Alfa Group, two sources close to the companies said, Vedomosti business daily reported Monday.

One source estimated the deal at U.S. $450 million, while the other valued Sky Mobile at between $400 million and $500 million, the daily reported.

Any purchase is subject to approval by the board of directors of VimpelCom, but the board has not yet considered the issue, a source said, the daily reported.

Spokespeople with the companies did not confirm the rumor, the daily reported.

In August, VimpelCom's CEO Alexander Izosimov said that VimpelCom may purchase Sky Mobile from Altimo.

In June, Altimo bought Sky Mobile, whose only asset was a GSM license then. A source said that Altimo paid about $5 million for Sky Mobile. At some point in September-October Kyrgyzstan?s largest mobile operator Bitel transferred all its assets to Sky Mobile, another source said.

Russia?s largest mobile operator Mobile TeleSystems (MTS) has been challenging the ownership rights over Bitel for over six months. MTS purchased a 51% stake in Bitel for U.S. $150 million in late 2005, but the purchase was challenged by little-known Russian company Rezervspetsmet, reportedly linked to Altimo. At the moment, Rezervspetsmet has operating control over Bitel, while MTS is seeking to regain control over the leading operator in court.

Bitel had about 600,000 users before it transferred its assets to Sky Mobile, according to Advanced Communications & Media (AC&M).

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Posted to the site on 30th October 2006