Telenor increases VimpelCom stakeholding and ends arbitration proceedings

Telenor is reported to be spending US$374.4 million to increase its stake in VimpelCom to 36.36 per cent and plans to drop its action against VimpelCom that was triggered by the firm’s acquisition of Egypt’s Weather Investments last year.

Telenor is said to be buying the shares from Weather Investments II, which is the investment vehicle through which Naguib Sawiris and his family hold their interests in VimpelCom.

In connection with the transaction, Telenor has withdrawn all its claims against Altimo and VimpelCom in the pending arbitration proceeding, and will work to expand the VimpelCom board to eleven members.

Telenor’s withdrawal of its claims will result in the termination of the VimpelCom shareholders agreement.

"This transaction takes Telenor to approximately the same voting position as a successful outcome of the arbitration process would have achieved, and is therefore a commercial solution we are happy with," said Jon Fredrik Baksaas, Telenor’s CEO. "The withdrawal of the arbitration claim will prevent further dilution of the VimpelCom shareholders, and it will enable a more normal corporate governance situation in VimpelCom. We will work to expand the VimpelCom board to eleven members. Together with the other shareholders we will continue our contribution to the industrial development of VimpelCom as we always have done."

Simultaneously with Telenor’s purchase of VimpelCom preferred shares from Weather, Telenor and Weather have entered into certain put and call arrangements regarding the remaining 71,000,000 VimpelCom preferred shares held by Weather.