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Telenor Starts Legal Action to Confirm its VimpelCom Share Purchase

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Norway's Telenor has started legal action in Bermuda to secure a declaration that its purchase of shares in Russia based VimpelCom was legal and did not trigger the mandatory tender offer requirements in VimpelCom's Bye laws.

In February, Telenor bought USD374 million of shares from Weather Investments to raise its voting shares in VimpelCom to 36.36 percent from 25.01 percent without considering potential call and put options.

The transaction has been disputed by an Altimo shareholder who argeued that Weather Investments should have put the shares up for public tender, not sold them via a private sale.

The Russian Federal Antimonopoly Service is also claiming that the transaction breached the country's foreign investment laws.

However, although based in Russia, VimpelCom is actually registered in Bermuda, the consequence of the settlement of a long running dispute between the shareholders in 2009.

"VimpelCom is a Bermuda company. The issue of whether Telenor and Weather Investments have an obligation under VimpelCom's bye-laws to make a mandatory tender offer is a question of law for determination by a Bermuda court," said Telenor's spokesman, Dag Melgaard. "We filed this claim to ensure that the court has the opportunity to promptly make such a determination."

VimpelCom said in a press statement that its Nominating and Corporate Governance Committee would assess Altimo's allegations and make recommendations to the VimpelCom Supervisory Board as to what action, if any, VimpelCom should take.

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Tags: telenor  vimpelcom  Russia  Norway  Bermuda