Something happens in Vimpelcom boardroom, again

25 Apr 2005

As expected, Telenor has blocked Russian cellco Vimpelcom’s proposed acquisition of Ukranian mobile operator Ukrainian Radio Systems. Five of Vimpelcom’s nine board members voted in favour of the deal on Friday, but a qualified majority of eight is required to pass the motion. The purchase of the company, which operates under the brand WellCOM, has been the source of a simmering feud between Telenor and fellow Vimpelcom shareholder, the Alfa Group since last summer. Alfa is keen to expand its operations in Ukraine and suggested the integration of Vimpelcom and WellCOM’s larger rival Kievstar last August, but Telenor vetoed the plan amid concerns that it would lose its majority share in the newly merged entity; Telenor currently holds 56.51% of Kievstar, with the remainder in the hands of Alfa-controlled companies, although the Norwegian telco has the smaller of the pair’s stakes in Vimpelcom. Telenor’s refusal to consider the deal prompted Alfa to turn its attentions to WellCOM, but with the Norwegian group holding three seats on the Russian cellco’s board it was never expected to be able to get approval for the plan.