VimpelCom Plans Stock Listing in Europe Next Year, Lunder Says
November 21, 2011, 5:19 AM ESTBy Jonathan Browning and Diana ben-Aaron
Nov. 18 (Bloomberg) -- VimpelCom Ltd., the Russian mobile- phone operator with more than 200 million customers worldwide, is planning a share listing outside the U.S. to broaden its investor base, the company’s chief executive officer said.
VimpelCom was formed last year after shareholders Telenor ASA and Alfa Group combined their Russian and Ukrainian wireless holdings into a company incorporated in Bermuda with its headquarters in Amsterdam. Since then, MSCI Barra has dropped the company from its global indexes. This year, VimpelCom completed a merger with Italy’s Wind Telecom SpA.
“We are looking at indexes and inclusion in indexes, we are looking at a European listing,” Jo Lunder said in an interview yesterday at a conference in Barcelona organized by Morgan Stanley. “During the first half of 2012 we will make a decision and implement it during the second half.”
VimpelCom has listed its American depository receipts on the New York Stock Exchange since 1997, the first Russian company to do that. Those shares are down 27 percent this year. The old VimpelCom previously had a listing in Russia.
Earlier this week, in the company’s first major strategy briefing since its merger with Wind, VimpelCom Chief Financial Officer Henk van Dalen said the company has 18 percent free float and is in 10 indexes. VimpelCom is aiming for a dividend of at least 80 cents a share through 2014. The stock fell 0.7 percent to $11.05 yesterday in New York, giving the company a market value of about $17.9 billion.
Shareholder Dispute
A long-running dispute between the two VimpelCom shareholders over Telenor’s proportion of shares after the Wind merger is moving smoothly through arbitration, Lunder said.
“Now we have an agreed process to resolve the issues,” he said. “There will be no deadlock. By the end of the first half we will have a decision.”
VimpelCom is Russia’s third-biggest mobile operator by subscribers. Lunder said he was comfortable with the company’s scale and ability to defend its share against OAO Mobile TeleSystems and OAO Megafon.
Another unknown following the Wind acquisition is the future of Algerian subsidiary Djezzy, which the local government may nationalize. VimpelCom this week scrapped an agreement with Weather Investments SpA, the parent of Orascom Telecom Holdings SAE, to offload risk or reward on the sale of Djezzy to Weather.
“So far Djezzy is doing fine,” Lunder said. “The business and the performance are not that badly hurt. When you look at the dialogue we are having with the government, the timetable fits fairly well with Djezzy’s ability to operate under current circumstances.”
Italian Crisis
The escalating European sovereign debt crisis hasn’t damaged Wind Italy, Lunder said.
“Wind has performed slightly above expectations actually,” he said. “Consolidation will take place when the different players believe the timing is there, but I don’t foresee an accelerated path as a result of the circumstances.”
The new Italian government, attempting to curb Europe’s second-biggest debt, said yesterday it will impose further austerity measures. Italy this week faced bond yields above the 7 percent threshold that led Greece, Portugal and Ireland to seek European Union aid.
--Editors: Kenneth Wong, Simon Thiel.
To contact the reporters on this story: Jonathan Browning in Barcelona via jbrowning9@bloomberg.net Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net;
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
