New twist in Vimpelcom-WellCOM stake sale saga

25 Jul 2005

Ukraine’s anti-monopoly body said on Friday that it has given Russia’s Vimpelcom permission to buy a controlling stake in Ukrainian Radio Systems (WellCOM), the minor wireless operator in the Ukraine that has been the cause of an open feud between Vimpelcom’s shareholders. Russian shareholder Alfa Group has been trying to push through a USD200 million purchase of 50% of WellCOM since last year, claiming that the cellco possesses plenty of growth potential in a rapidly expanding market. However, fellow investor Telenor of Norway is fiercely opposed to the purchase and the pair have been embroiled in a vicious battle for control of Vimpelcom since the early part of this year. Telenor and Alfa already share ownership of one of the Ukraine’s biggest mobile operators, Kievstar, and the Norwegian company says a potentially costly raid for the far smaller WellCOM has ‘no business merit’; at the end of March 2005 Kievstar had 7.662 million users compared with WellCOM’s estimated 50,000.