Alfa Group seeks to dissolve Vimpelcom shareholder agreement with Telenor

19 Apr 2011

According to Dow Jones Newswires, Vimpelcom shareholder Alfa Group has announced that it is looking to dissolve its shareholder agreement with fellow stakeholder Telenor. The announcement was made just hours after Vimpelcom completed its long-running USD6.5 billion merger with the telecoms assets of Egyptian billionaire Naguib Sawiris. Russian conglomerate Alfa, which part-owns Vimpelcom through its Altimo telecoms holding arm, said that it ‘will trigger the termination of the current shareholders agreement with Telenor [in an attempt to] ensure proportional rights for all minority shareholders in the company and avoid further destabilising conflicts between major shareholders’.

The uneasy partnership between Alfa and Telenor has been marred by a series of unsavoury shareholder disputes, notably the five-year battle over the ownership of Ukrainian mobile operator Kyivstar, which was finally resolved in April 2010, with a new shareholder agreement that saw Kyivstar and Vimpelcom become 100% subsidiaries of incorporated company Vimpelcom Ltd. At that date, Altimo’s voting stake in the new company stood at 44.65% (39.19% equity stake), while Telenor had 36.03% voting rights (39.58% equity) with a free float of 19.32% voting shares (21.23%). Despite the new shareholder structure, the two main shareholders subsequently failed to see eye to eye, and Telenor strongly objected to Vimpelcom’s merger with Sawiris’ Wind Telecom, complaining that the deal ‘didn’t make strategic or financial sense for Vimpelcom’s shareholders’, urging the company’s independent directors to vote against the proposed deal.

Altimo has said that because the Sawiris family now holds a 30.6% voting stake (20% equity stake) in Vimpelcom there are now three major shareholders with approximately equal stakes, meaning that the current shareholder agreement is ‘no longer appropriate’ as it doesn’t give Sawiris actual seats on the board. Between them, Altimo and Wind Telecom would have the required majority to alter the structure of the board, potentially freezing Telenor’s influence out of all major decisions. Altimo spokesperson Evgeny Dumalkin told Bloomberg that the option of buying Telenor’s stake ‘hasn’t been considered’.

Russia, Beeline (Russia), Telenor Group, VEON