Norwegian telecoms group Telenor has begun a public offering in the United States of 142.500 million of its VimpelCom Ltd American Depository Shares (ADS). In a press release confirming the development, Telenor noted that, with it currently owning approximately 580 million ADS, or 33% of VimpelCom’s total outstanding common shares, this initial transaction represents an 8.1% holding. Further, Telenor has said it intends to grant the underwriters an option to purchase up to 21.375 million additional ADS at the public offering price, less underwriting discounts and commissions. The price at which Telenor will sell the ADS has not yet been determined.
VimpelCom shares closed at USD3.90 in US trading on Friday, valuing the stake at USD556 million, Bloomberg noted in a report on the development. Telenor confirmed that the pricing of the offering will be announced following the completion of the bookbuilding process, whilst indicating that it may separately launch a three-year bond exchangeable into VimpelCom ADS in an aggregate principal amount of up to USD1 billion, with an exchange premium which could be up to 35%. The exchangeable bond will be launched outside the US to non-US persons, pursuant to Regulation S under the US Securities Act.
As previously reported by CommsUpdate, in October 2015 Telenor announced its intention to sell its entire 33% stake in Russian-backed, Amsterdam-based multinational telecoms group VimpelCom, in order to focus better on its core operations. In a stock market statement at the time, 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 … the disposal of our shares is in the best interest of our shareholders, and in accordance with Telenor Group’s long-term strategic focus.’