End in sight for Alfa-Telenor disputes?

2 Aug 2007

The Kremlin is supporting a deal that could resolve a long-running dispute between conglomerate Alfa Group’s telecoms arm, Altimo, and Norwegian telco Telenor, reports the Moscow Times quoting a source inside Alfa familiar with the negotiations. The deal would see the two firms merge their assets across a range of telecom interests in Russia and eastern Europe, including their stakes in Kyivstar, Vimpelcom, Golden Telecom and MegaFon. The wrangling between Altimo and Telenor has played out in the boardroom of Russian cellco Vimpelcom, in which both firms hold stakes (Altimo 44%, Telenor 30%). In 2005, Altimo sparked hostilities by expanding Vimpelcom into Ukraine by taking over Ukrainian Radio Systems, a competitor to Telenor-controlled Ukrainian market leader Kyivstar, in which Alfa also holds a minority interest. Kirill Babayev, Altimo’s vice president for public relations, did not confirm that a deal would be reached but said yesterday that his company was ‘interested in reaching an agreement with Telenor on all the disputed matters.’ Telenor’s vice president for communications, Dag Melgaard, did not rule out a settlement with Altimo, but stressed that the aim had to be a split of business interests. ‘We would be happy to resolve the dispute…but at the end there must be a separation between us,’ he told the Moscow Times. He added Telenor was still involved in arbitration lawsuits against Altimo in Geneva and New York, and added, ‘Altimo cannot be trusted, because they have been signing agreements and walking away from them.’