Norway’s Telenor Group has completed its purchase of an increased stake in Russia’s Vimpelcom in the face of opposition from Russian co-owner Altimo and Russia’s Federal Antimonopoly Service (FAS). The purchase of the disputed 3.5% stake from Egyptian tycoon Naguib Sawiris’ Weather Investments unit, which raises Telenor’s stake to 42.95%, is the latest episode in a long-running campaign by Telenor to secure what it regards as an equal holding in the Russian company alongside Altimo. As reported by TeleGeography’s CommsUpdate in August this year, Telenor argued that the roughly 6% stake in Vimpelcom held by Ukrainian tycoon Viktor Pinchuk’s EastOne company (represented by Cyprus-based Bertofan Investments) should be counted as part of Altimo’s stake, rather than its own, giving the Russian partner effective control over the group. However, Altimo vice president Evgeny Dumalkin hit back by saying: ‘We flatly reject all accusations that EastOne nominally owns Vimpelcom shares in Altimo’s interests’.
Confirming this week’s development, Telenor spokesman Dag Melgaard noted: ‘Under the terms of the option agreement Telenor entered into with Weather in February 2012, Telenor was obligated to take delivery of Weather’s remaining Vimpelcom preferred shares following Weather’s exercise of its put option. However, as a business matter and in view of the history of the relevant transactions, we seek a solution including Altimo, [minor shareholder] Bertofan [Investments] and Telenor that gives Altimo and Telenor parity in Vimpelcom. To this end, Telenor proposes that Altimo and Telenor offer to buy the preferred shares held by Bertofan for a full and fair price, and in such proportions as will secure equal ownership positions for Altimo and Telenor after such transaction’. Telenor clarified that, through its actions, it seeks not to alter the current board structure, merely to ‘restore proper corporate governance in Vimpelcom’.
However, Telenor’s offer of a proverbial olive branch appears to have been received coolly, with the Vimpelcom Group revealing that it has decided to delay the registration of the requested transfer of preferred shares from Weather Investments to Telenor East Holding, until the order issued by the Moscow Arbitration Court prohibiting such transfer ceases to have effect. In a press release Vimpelcom confirmed: ‘The committee, acting under a unanimous delegation of authority from the Supervisory Board, met today to consider Telenor’s request to register the preferred shares transfer. The committee determined that it is in the best interests of Vimpelcom not to register the transfer of preferred shares to Telenor by Weather at this time. The committee took into account the potential adverse consequences for Vimpelcom’s Russian business if the order is considered by the Russian authorities to have been breached with the support and participation of Vimpelcom’.