Altimo inks deal to acquire 6% stake from Bertofan to seize control of Vimpelcom

30 Oct 2012

According to the Prime-Tass business news agency Altimo, the telecoms arm of Russian financial and industrial conglomerate Alfa Group, has agreed to boost its voting stake in Amsterdam-based international telecoms group Vimpelcom from 41.90% to 47.85%, after agreeing to purchase 123.6 million preferred shares from Ukrainian tycoon Viktor Pinchuk’s EastOne company (represented by Cyprus-based Bertofan Investments). Altimo will pay USD217.54 million for the shares, equivalent to a 5.95% share, and the transaction must be completed within 60 days. Altimo plans to finance the deal using its own funds, as well as a portion of the USD740 million five-year credit line opened with Alfa-Bank, the banking arm of its parent company.

The deal is expected to mark the conclusion of the increasingly bitter power struggle for control of Vimpelcom between Altimo and Norway’s Telenor Group. Earlier this year Telenor agreed to purchase a disputed 3.5% stake in Vimpelcom from Egyptian tycoon Naguib Sawiris’ Weather Investments unit, which effectively raised its holding to 42.95%. This was the latest episode in a long-running campaign by Telenor to secure what it regards as an equal holding in the Russian company. Following the transaction though, the Vimpelcom Group revealed that it had 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. As reported by TeleGeography’s CommsUpdate in August this year, Telenor argued that the stake held by Pinchuk 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’.

TeleGeography’s GlobalComms Database writes that Pinchuk’s EastOne, which controls Ukraine’s biggest steel pipe producer Interpipe, acquired its stake from Forrielite, another Cyprus-based holding company owned by Alfa Group founder Oleg Kiselev in December 2011, paying USD111 million. Forrielite acquired its stake from Altimo in June 2011 for approximately USD100 million.

Russia, Altimo (part of the Alfa Group), Telenor Group, VEON