Squabbling investment partners Altimo, a subsidiary of Russia’s Alfa Group, and Norwegian telecoms group Telenor have agreed in principle that Russian mobile operator Vimpelcom could buy Ukraine’s cellular market leader Kyivstar with a mixture of cash and equity. Telenor owns 29.9% of Vimpelcom and 56.5% of Kyivstar while Altimo owns 32.9% of Vimpelcom and 43.5% of Kyivstar. ‘Altimo welcomes Telenor’s acceptance of Altimo’s proposal of a cash plus equity structure in Vimpelcom’s acquisition of Kyivstar,’ the Russian group said yesterday.
Altimo said it respects Telenor’s intention to implement a so-called ‘market-based separation mechanism’, envisaged as a tool for either party to gain control in Vimpelcom if the other party is in breach of the shareholders’ agreement in the eyes of an independent third party. Although Altimo maintains that such a mechanism should not be a prerequisite to a value-creative merger between Vimpelcom and Kyivstar, it says it is willing to discuss the details of the mechanism provided Telenor acts in accordance with international business practice and Russian legislation. Kirill Babaev, vice president of Altimo, said an agreement could be reached within two to three weeks.