- Sale to end company's 16-year investment in wireless provider
- Norwegian carrier to have 7.5 billion-krone expense for sale
Telenor ASA will sell its 20 billion-krone ($2.4 billion) stake in VimpelCom Ltd., exiting the third-biggest Russian wireless carrier after 16 years to focus on markets such as the Nordic region.
The company said Monday it will explore all options for the 33 percent stake in the mobile-phone company co-owned by Russian billionaire Mikhail Fridman. Telenor, the Nordic region’s largest phone company, expects a non-cash impairment of about 7.5 billion kroner in the third quarter.
Telenor is giving up on an asset that it couldn’t fully control and which has been hurt by Russia’s economic slump. In December, Telenor Chief Executive Officer Jon Fredrik Baksaas left the board of VimpelCom after Swedish authorities started a probe into whether the wireless carrier paid bribes in Uzbekistan.
“The VimpelCom asset, where Telenor holds a minority position without the possibility to fully control the company, has been challenging,” Telenor Chairman Svein Aaser said in a statement. The company said it expects the sale process to “take some time.”
Shares of Telenor advanced 1 percent to 156.8 kroner at 9:13 a.m. in Oslo. Shares of VimpelCom have dropped about 70 percent since the start of last year amid Russia’s economic slump and a plunge by the ruble, and closed at $4.05 in New York on Oct. 2.
Telenor has expanded in Asian and eastern European markets to benefit from the surging demand for mobile services. VimpelCom is trying to reverse a sales drop caused by currency fluctuations and slowing economies of Russia and Ukraine as well as regulatory restrictions in markets including Italy.
Telenor bought about a third of VimpelCom in 1999 to expand beyond the Nordic region. Telenor said it has invested 15 billion kroner in VimpelCom and received about 20 billion kroner in dividends.
Norway’s government owns about 54 percent of Telenor.