BackAltimo, Telenor end dispute with joint venture
Altimo, Telenor end dispute with joint venture
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Moscow: Norwegian telecom firm Telenor and Russia’s Altimo are to create a mobile operator to end a long-running feud over control of one of Russia’s main mobile service providers, the companies said on Monday.
Telenor and Altimo will combine their common assets in VimpelCom and Kyivstar to create a new mobile operator, in a deal that means “resolution of all outstanding disputes" between the two firms, the companies said in a joint statement.
“We have turned a five-year struggle into an exciting venture for the future," Jon Fredrik Baksaas, president and chief executive of Telenor Group, said in the statement.
Altimo is the telecoms arm of Alfa Group, one of Russia’s largest financial-industrial conglomerates, whose main shareholder is billionaire Mikhail Fridman.
Telenor had been involved in a half-decade-long dispute with Alfa Group over control of Vimpelcom, Russia’s second largest mobile operator.
Altimo and Telenor have now agreed to suspend all their ongoing legal proceedings and will move to withdraw or settle them before the deal is completed by mid-2010, the companies said.
Under the deal, Telenor would receive 35.42% of voting shares in the new firm, while Altimo would get 43.89%. The new company will be called VimpelCom Ltd, listed on the New York Stock Exchange and incorporated in Bermuda.
“The governance structure agreed for VimpelCom Ltd is designed to significantly reduce the potential for new disputes between the shareholders," the companies said.
The five-year battle saw numerous proceedings in the Russian court system which raised concerns about the business climate for foreign firms working in Russia.
In June, Russian authorities ordered the sale of almost all of the 30 percent stake owned by Telenor in Vimpelcom, after seizing the Norwegian firm’s stake in a legal row.
Alfa owns 44% of Vimpelcom.
In a separate statement, Vimpelcom welcomed the deal, saying it would strength its global position.
Kyivstar is the biggest mobile operator in Ukraine, in which Telenor has 56.52% and Altimo 43.5%.
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