Telenor and Alfa Group Nearing a Solution to Their Long-Running Disputes
Norway's Telenor and Russia's Alfa Group are reported to be close to agreeing an asset swap which will finally conclude their long running legal and commercial battles. According to The Moscow Times, Alfa will hand over its entire 43.5 percent stake in Ukraine's Kyivstar to Telenor - in exchange for twelve percent of the voting shares in Russian operator, Vimplecom.
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 deal also expects that the Norwegian government will transfer a five percent stake in Telenor to Alfa, which would reduce the Norwegian government's holding to just below 50%.
The deal is expected to be an all-shares transaction and no cash will be involved - although both companies have previously put a valuation of around US$5 billion on Kyivstar.
Kirill Babayev, a senior vice president of Altimo, which runs Alfa Group's telecom assets, confirmed the talks. "We are indeed holding talks with Telenor about an asset swap but cannot comment on the commercial details of the negotiations," he said.
Telenor and Alfa have been at loggerheads over their shareholdings in Vimplecom and the Ukrainian market for several years.
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).
Last January, a Geneva arbitration tribunal upheld a complaint from Telenor, blocking Alfa Group from nominating more than four candidates for election to the Vimplecom board, while Telenor was allowed to nominate five members to the board.
Telenor and a company affiliated with the Alfa Group have been engaged in a US$3.8 billion lawsuit in Siberia - just one month after Telenor filed a US$1 billion legal action of its own against several Alfa Group affiliates.
On the web: The Moscow Times
Posted to the site on 7th October 2008
