Telenor Is in Talks to Sell VimpelCom Stake, CEO Brekke Says

Updated on
  • Nordic company is seeks to sell 33% holding soon, Brekke says
  • Carrier is open to acquiring assets in Indonesia, Vietnam

Telenor ASA, the Nordic region’s largest phone company, said it’s in talks with possible bidders for its $2.42 billion stake in VimpelCom Ltd., and is targeting countries such as Vietnam and Indonesia for future growth.

“We are in contact with potential buyers,” Telenor Chief Executive Officer Sigve Brekke said in an interview in Singapore on Friday, declining to name any suitors. “We are not dumping our shareholding. We want a fair price.”

The company, which hasn’t appointed financial advisers, is seeking to sell the holding soon, Brekke said, without elaborating. As it pulls back from Vimpelcom -- a carrier that operates in countries including Russia, Uzbekistan and Kazakhstan -- Telenor is open to acquiring assets in growth markets such as Indonesia, Vietnam and the Philippines, he said.

Selling the stake, a move that Telenor flagged last year, would help the Nordic phone company unload an asset that’s been hurt by Russia’s economic slump. It would also give the carrier funds to expand its operations in emerging markets in Asia.

VimpelCom, which has more than 200 million customers, counts Telenor as its second largest shareholder after LetterOne Holdings SA, which owns a 56 percent stake. Telenor’s 33 percent stake is valued at $2.42 billion based on U.S. trading Friday.

The lack of control is partly why Telenor wants to sell out.

“We don’t want to be sitting there as a financial shareholder without any influence on the real operations,” Brekke said. “We’re better off redeploying those assets in markets where we can add value and where we also see growth.”

VimpelCom has also been embroiled in a corruption investigation in Uzbekistan. In February, the company agreed to pay a near-record $795 million to settle U.S. and Dutch claims that it bribed officials to win business in the former Soviet republic.

The scandal led Norway’s government to fire Telenor’s then chairman and a former chief executive officer who was advising the VimpelCom board left the company because of the investigation. Chief Financial Officer Richard Olav Aa and General Counsel Pal Wien Espen were were also relieved of their duties until there’s greater clarity on the corruption probe, Telenor said on Nov. 12.

On Thursday, VimpelCom filed regulatory documents for the sale of as much as 89 percent of its stock by the company’s biggest investors.

LetterOne has no plans to sell, Brekke said. Stuart Bruseth, a London-based spokesman for LetterOne, didn’t reply to calls and e-mails seeking comment.

Vimpelcom slipped 2.6 percent to $4.15 as of mid-morning Friday in New York, paring Thursday’s 8.1 percent jump. Telenor fell 1.6 percent to 131.8 kroner Friday afternoon in Oslo, after dropping 4.1 percent on Thursday.

— With assistance by Ilya Khrennikov, and Adam Ewing

(Updates share prices throughout.)
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