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Russia’s MegaFon Said to Plan Hiring Banks for IPO

OAO MegaFon, Russia’s second-largest mobile-phone operator, may raise as much as $4 billion in an initial public offering and plans to interview banks as early as this weekend, according to two people with knowledge of the plan.

MegaFon, based in Moscow and partly owned by Sweden’s biggest phone company, TeliaSonera AB, has yet to decide where the listing will take place or set the amount it seeks to raise, said the people, who declined to be identified because the plans are private. While there’s no definite timetable, the IPO could happen as early as this year, said one of the people.

The three major shareholders in MegaFon -- TeliaSonera, Russian billionaire Alisher Usmanov’s AF Telecom and the telecom investor Altimo -- have been discussing the ownership structure and future governance of the company for about three months, Cecilia Edstroem, a spokeswoman for Stockholm-based TeliaSonera, said April 11.

TeliaSonera Chief Executive Officer Lars Nyberg declined to comment on the MegaFon talks or a possible IPO. Dmitry Smirkin, head of MegaFon’s press office, declined to comment.

At $4 billion, MegaFon’s IPO would be the biggest worldwide since July, when Spain’s Bankia SA raised $4.4 billion, according to data compiled by Bloomberg. O1 Properties Plc, a Russian real estate investment firm, is seeking about $400 million selling primary shares in a London IPO, according to terms for the sale obtained by Bloomberg.

Usmanov owns 31 percent of MegaFon and TeliaSonera holds 44 percent, according to the company’s website. TeliaSonera may sell part of its stake in MegaFon, UBS AG said in a report this month.

TeliaSonera and Altimo, the telecommunications arm of Alfa Group, agreed in 2009 to combine their stakes in MegaFon and Turkcell Iletisim Hizmetleri AS in a new company to clarify ownership and increase dividends. The agreement hasn’t been carried out because of legal disputes.

The Russian business publication RBC Daily, citing unidentified people, reported April 2 that Usmanov’s AF Telecom was looking to buy out Altimo’s 25.1 percent stake in MegaFon for $5 billion. That would make AF Telecom a majority owner.

MegaFon CEO Sergei Soldatenkov may step down next week ahead of schedule to become Russia’s communications minister, Moscow-based newspaper Vedomosti reported, without citing anyone. The company announced in January that Soldatenkov didn’t plan to renew his contract, expiring in June, after nine years in the job.

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