Norway’s Telenor Group yesterday announced its intention to sell its entire 33% stake in Russian-backed, Amsterdam-based multinational telecoms group Vimpelcom Ltd, in order to focus better on its core operations. In a stock market statement, Svein Aaser, Chairman of Telenor’s Board of Directors, explained the decision: ‘The Vimpelcom asset, where Telenor holds a minority position [33.0% equity, 43.0% voting rights] without the possibility to fully control the company, has been challenging. Based on a strategic review by the Board and the CEO … the disposal of our shares is in the best interest of our shareholders, and in accordance with Telenor Group’s long-term strategic focus.’ The statement added that Vimpelcom has gradually contributed less to the value of Telenor Group, while the value of Telenor’s core operations have increased rapidly: the market value of the Norwegian group’s Vimpelcom stake currently represents approximately 8% of Telenor’s market capitalisation.
Telenor Group says that the current market value of its 33% stake in Vimpelcom Ltd is approximately NOK20 billion (USD2.39 billion). It adds that it has invested NOK15 billion in Vimpelcom to date, and received NOK20 billion in dividends in return. Telenor intends to explore ‘all options’ to divest the Vimpelcom shares, and has not yet set a timeframe for the sale. The Vimpelcom Ltd stock value declined to end the third quarter at USD 4.11 per share versus book value of USD5.64 per share; as a consequence of the intention to divest, impairment evaluations going forward will be based on the market price of Vimpelcom Ltd shares, and this will result in Telenor Group booking a non-cash impairment of approximately NOK7.5 billion for the third quarter.