UPDATE: Telenor to sell 33% in Russian VimpelCom’s owner

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MOSCOW, Oct 5 (PRIME) – Norwegian telecom giant Telenor Group will completely withdraw from the capital of Amsterdam-based VimpelCom Ltd., the sole owner of Russian mobile operator VimpelCom, in which its owns 33%, and focus on its core operations, Telenor Group said in a statement Monday.

“The VimpelCom asset, where Telenor holds a minority position without the possibility to fully control the company, has been challenging. Based on a strategic review by the board and the CEO, and after due considerations, Telenor Group has decided to divest its shares in VimpelCom Ltd. The disposal of our shares is in the best interest of our shareholders, and in accordance with Telenor Group’s long-term strategic focus,” Chairman of Telenor Group’s board of directors Svein Aaser said, as quoted in the statement.

The Norwegian group will explore all options to divest its shares in VimpelCom Ltd., and will seek to find the best solution for Telenor and its shareholders. “A timeframe for the divestment has not been set, but a process like this will normally take some time. As a result of today’s announcement Telenor will not convert its VimpelCom Ltd. preferred shares into common shares,” the statement read.

VimpelCom Ltd. has gradually contributed less to the value of Telenor Group, and the value of Telenor’s core operations have increased rapidly. The market value of the VimpelCom Ltd. shares represents about 8% of Telenor’s market capitalization.

The VimpelCom Ltd. stock declined in July–September and ended at U.S. $4.11 per share as compared to the book value of $5.64 per share. As a consequence of the intention to divest, impairment evaluations going forward will be based on the market price of the VimpelCom Ltd. share, Telenor Group said.

Telenor’s spokesman Glenn Mandelid said that the Norwegian company has not started any negotiations with investors yet. Telenor is not in a hurry to sell the interest in VimpelCom Ltd. and will find a solution that will be profitable for its shareholders.

The current market price for Telenor’s stake in VimpelCom Ltd. amounts to 2 billion euros is a fair price, Mandelid said.

VimpelCom Ltd.’s second largest shareholder, LetterOne Technology, a unit of Alfa Group of businessman Mikhail Fridman and his partners, does not have a preemptive right of purchase.

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