Telenor ASA, the biggest shareholder in VimpelCom Ltd., wants the mobile-phone provider to shun acquisitions in favor of boosting operational efficiency and improving its presence in emerging markets.
Telenor, the Nordic region’s largest phone company, bought 234 million preferred shares of VimpelCom from Weather Investments II S.a.r.l. for $374.4 million, increasing its voting stake in the company to about 36 percent, according to a statement issued today.
“VimpelCom’s strategy of acquisitions will now be changed to improving operational efficiency,” Dag Melgaard, spokesman for Telenor, said by phone from Oslo today. “VimpelCom should grow in emerging markets. We want to make the company a success.”
Amsterdam-based VimpelCom doubled its mobile-customer base to about 181 million in 20 countries with the purchase of assets from Egyptian billionaire Naguib Sawiris in 2010, a deal valued at around $6.5 billion at the time. Telenor objected to the acquisitions and began arbitration against fellow shareholders, a dispute it agreed to end today. The merger with Sawiris’ Wind Telecom SpA gave Telenor, which held more than 30 percent of VimpelCom at the time, the right to 25 percent of the combined company.
Telenor is yet to decide whether to convert their preferred VimpelCom shares into ordinary stock, Melgaard said.
“At the moment, voting rights in VimpelCom are our priority and not the dividends,” he said, adding that Telenor is seeking to boost Vimpecom’s board to 11 members from the current nine.
Telenor may decide “at any time” whether to buy another 71 million of preferred shares in VimpelCom, a move that would boost their voting stake to 39.8 percent, Melgaard said. Such a move would give Telenor and minority shareholders control of more than 50 percent of VimpelCom, said Luis Saenz, chief executive officer of the U.S. unit of Moscow-based brokerage Otkritie Financial Corp.
An extraordinary VimpelCom shareholders meeting may be called within the next two months, Telenor’s Melgaard said.
Calls to the office phone of VimpelCom spokeswoman Elena Prokhorova in Moscow after business hours weren’t answered. VimpelCom is also Russia’s second-largest mobile phone operator.