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    Court upholds decision to sell Telenor's stake in VimpelCom

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    A Moscow court rejected on Tuesday an appeal from Norway's Telenor to suspend an order by Russian bailiffs to auction its 26.6% stake in Russia's second largest mobile phone operator, VimpelCom.

    MOSCOW, October 6 (RIA Novosti) - A Moscow court rejected on Tuesday an appeal from Norway's Telenor to suspend an order by Russian bailiffs to auction its 26.6% stake in Russia's second largest mobile phone operator, VimpelCom.

    The Norwegian telecoms giant is disputing the order issued by the Russian Bailiff Service in June and upheld by a court in July.

    Telenor and the Russian conglomerate Alfa Group, the two main shareholders in VimpelCom, have been embroiled in a long-running dispute over the operator's move into the Ukrainian market. Each party has filed several lawsuits over the past few years.

    Following the latest lawsuit filed by Farimex, which is registered in the British Virgin Islands and holds just 0.002% of VimpelCom's stock, Russia's 8th Arbitration Appeals Court in late February ordered Telenor to pay $1.728 billion to VimpelCom.

    The lawsuit claimed the Norwegian telecoms operator had delayed a deal to purchase Ukrainian cell phone operator Ukrainian Radio Systems.

    In 2004-2005, Telenor resisted VimpelCom's attempt to enter the Ukrainian market and buy into Ukrainian Radio Systems, as it put VimpelCom in direct competition with the Norwegian company's other interests in Ukraine.

    A total of 26.6% of Telenor's 29.9% stake in VimpelCom has been frozen as part of February's court ruling on the Farimex lawsuit.

    Telenor's previous lawsuits were also rejected by courts.

    The claimant argued that the bailiffs should have issued an order on valuating one share and the entire stake before ordering the sale of the shares. However, the 9th Moscow Appeals Arbitration Court upheld a previous court's decision.

    Telenor said it intended to continue challenging the court's decision.

    Meanwhile, in a bid to end the dispute, Telenor and Alfa Group said on Monday they were combining their mobile phone holdings in Russia and Ukraine into a single company.

    "The parties have reached an agreement to combine their holdings in OJSC VimpelCom and Kyivstar into a new jointly-owned mobile telecoms operator, VimpelCom Ltd.," Telenor and Altimo, the telecommunications arm of Alfa Group, said in a joint statement.

    The deal will establish a leading emerging markets mobile operator with significant in-market and international growth opportunities, the statement said.

    Altimo will get 43.89% of the voting stock in the new company while Telenor will receive 35.42% and 20.69% will stay in free float. The new company is incorporated in Bermuda, will be headquartered in the Netherlands and will be listed on the New York Stock Exchange, the statement said.

    "The parties have agreed to suspend all their ongoing legal proceedings and take action to withdraw or settle them prior to the transaction being completed... The parties expect to complete the proposed Exchange Offer and the other related transactions by mid-2010," the statement said.

     

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