The long-running feud between Telenor and Russia's Alfa Group may be nearing a conclusion after it was reported that the two companies are again considering merging VimpelCom and Ukraine's Kyivstar. Two executives close to the companies told Vedomosti that the deal envisions Alfa's telecoms arm, Altimo and Telenor each receiving a 40 percent stake of the merged company, with the additional shares going to various VimpelCom minority shareholders
Altimo head Alexei Reznikovich reportedly proposed this deal to Telenor in late March. A source close to Telenor confirmed that the deal still has many points that have not been agreed upon.
Telenor and Alfa Group are partner shareholders both in VimpelCom and Kyivstar. Telenor holds 26.6% in VimpelCom and 56.5% in Kyivstar, while Alfa Group holds 32.9% in VimpelCom and 43.5% in Kyivstar.
The conflict between VimpelCom's shareholders began when VimpelCom purchased Ukrainian Radiosystems (URS) mobile operator in late 2005 in order to enter the Ukrainian market. Telenor opposed the purchase and was able to block the decision at VimpelCom's board of directors, while it was supported by Alfa Group, which was able to get the deal approved at VimpelCom's extraordinary general meeting of shareholders (EGM).
Since then, the two companies have been variously fighting in the courts, or rumoured to be close to settling their dispute over the Ukrainian operator.
Telenor's shares in VimpelCom have been seized by a Russian bailiff following a controversial court ruling in favour of mystery company, Farimex - which is believed to be linked to Alfa Group, although both firms deny this.
Telenor also believes that Farimex is behind an investigation launched by the Anti-Monopoly Committee of Ukraine (AMC) against Telenor and Kyivstar. Farimex claims that Telenor, Kyivstar and Storm (Altimo's local subsidiary) are in breach of Ukrainian Competition legislation by including a non-participation clause in the Shareholders agreement and that Telenor hindered competition in Ukraine through delaying VimpelCom's acquisition of Ukrainian Radio Systems (URS).
On the web: Moscow Times
Posted to the site on 26th June 2009
Posted to: www.cellular-news.com/story/38228.php