Source Says Alfa, TeliaSonera Talks on Asset Swap Breakdown"

MOSCOW, Mar 30 (Prime-Tass) -- Talks between Altimo, the telecommunications arm of Russian industrial and financial holding Alfa Group, and Finnish-Swedish telecommunications operator TeliaSonera on a possible asset swap have broken down amid several disagreements, a source close to the negotiations said, Vedomosti business daily reported Friday.

Altimo's Vice President Kirill Babayev confirmed to the daily that the two companies were no longer holding any talks.

In February, several sources said that Altimo had been in talks for several months with TeliaSonera on a possible swap of assets.

The talks were suspended because the two companies failed to agree on several issues, the source told the daily. TeliaSonera wanted to make the asset swap in two stages; first getting Altimo's stake in MegaFon and then a stake in Turkcell, while the Russian company wanted to make a swap in one stage.

A second reason for the breakdown in talks was that Altimo and TeliaSonera could not come to an agreement on the stake Altimo would get in the Nordic operator in exchange for its stakes, the source said, adding that the two parties had discussed a stake between 10% and 17%.

In addition, TeliaSonera did not want to carry out the deal unless Altimo settled its dispute over another affiliate, VimpelCom, with Norway's Telenor, the source said, the daily reported.

Alfa Group and TeliaSonera both have stakes in MegaFon and Turkcell. Alfa Group has a 25.1% stake in MegaFon and a 13.2% stake in Turkcell, while TeliaSonera controls directly and indirectly a 43.7% stake in MegaFon and 37.04% in Turkcell.

Among Alfa Group's other telecommunications assets are a 42.4% stake in Russia?s second largest mobile operator VimpelCom, 29% in U.S.-registered telecommunications operator Golden Telecom, 43.5% in Ukraine's largest mobile operator Kyivstar and a 100% stake in Kyrgyz mobile operator Sky Mobile.

Altimo is seeking to get a stake of around 20% in a global telecommunications operator through an asset swap, Altimo's General Director Alexei Reznikovich said in 2006.

End"

Posted to the site on 30th March 2007