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Telenor ASA (TEL), the Nordic countries’ biggest phone operator, said a dispute with Russian regulators about ownership of VimpelCom Ltd. (VIP) will end after billionaire Mikhail Fridman’s Altimo boosted its stake in the world’s sixth- biggest mobile phone company.
VimpelCom’s American depositary receipts jumped 8.7 percent to $10.20 in New York yesterday, the highest level since May 1, after Altimo, Alfa Group’s telecommunications division, said it raised its stake in VimpelCom to 40.5 percent of the voting rights by purchasing 305 million shares from Egyptian billionaire Naquib Sawiris’s Weather Investments II. The Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in New York climbed to a three-month high.
Telenor said today it’s acquiring more shares from Sawiris, increasing its stake to almost 43 percent from 39.5 percent. Russia’s Anti-Monopoly Service, known as FAS, is disputing the Nordic company’s right to raise its stake after it bought 11.3 percent of VimpelCom from Weather Investments in February.
“We believe this transaction will necessarily put an end to the FAS lawsuit as it shows clearly that it is completely groundless,” Dag Melgaard, an Oslo-based spokesman for Telenor, said by e-mail yesterday, commenting on Altimo’s deal.
A Moscow court banned Amsterdam-based VimpelCom’s Russian unit from paying dividends on 2011 profits because of FAS’s dispute. VimpelCom has a “solid” cash position for operating requirements even without the dividends, Chief Financial Officer Henk van Dalen said yesterday on a conference call.
Ekaterina Zubova, an FAS spokeswoman in Moscow, declined by phone to comment on whether Altimo’s acquisition will end the dispute when contacted by Bloomberg today. Altimo yesterday said it withdrew claims that Weather and Telenor violated agreements by failing to make a mandatory tender offer for VimpelCom shares.
Office of Natalya Timakova, Prime Minister Dmitry Medvedev’s press secretary, declined to comment whether authorities, including the government’s Commission for Foreign Investments which initiated proceedings against Telenor, will agree to end the dispute after Altimo dropped its claims against Telenor. Person who answered the phone declined to give her name and said Timakova was on vacation.
“The news is quite positive for VimpelCom,” Simon Mandel, director of emerging Europe equity sales at Auerbach Grayson & Co. in New York, said by e-mail. “It removes a great deal of uncertainty surrounding Weather’s stake and simplifies the shareholder structure of the company.”
Bobby Leach, the Amsterdam-based communications director for VimpelCom, declined to comment on Altimo’s share acquisition.
Telenor is buying 71 million preferred shares for $113.6 million from Sawiris, raising its stake to almost 43 percent from 39.5 percent, Melgaard said today. The deal is expected to close before October, he said, declining to comment on whether Telenor will buy or sell VimpelCom stock.
Altimo is seeking to further increase its VimpelCom stake after the $3.6 billion acquisition from Weather and is looking to buy shares from Telenor, Altimo’s Vice President Evgeny Dumalkin said in a phone interview from Moscow yesterday. He said he expected Telenor to use the option to buy Sawiris’s shares.
“We are calling on Telenor to sell some of its shares to even our stakes in the company,” Dumalkin said. “We believe that Russian and foreign shareholder must have equal stakes in VimpelCom. It’s our strategic vision and we call on Telenor to share such approach.”
The Bloomberg Russia-US Equity Index rose 0.5 percent to 94.89. The Market Vectors Russia ETF (RSX), the biggest U.S.-traded exchange-traded fund that holds Russian shares, dropped 0.4 percent to $27.76. The RTS Volatility Index slumped 2.1 percent to 29.77.
Oil, Russia’s biggest export earner, climbed to a three- month high in New York yesterday after U.S. stockpiles fell and Saudi Arabia called on its citizens to leave Lebanon, adding to tension in the Middle East. Industrial production in the U.S. increased in July. RTS stock-index futures increased 0.6 percent to 143,050.
“The futures are responding to the slightly positive tone in U.S. market and higher oil,” Alec Young, a global equity strategist at S&P Capital IQ, said by phone yesterday.
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