Telenor Said to Hire JPMorgan for Sale of VimpelCom Stake

  • VimpelCom said to work with Morgan Stanley on valuation
  • Telenor could seek to sell part of the holding in the market

Telenor ASA, the Nordic region’s largest phone company, hired JPMorgan Chase & Co. to explore the sale of its $2.06 billion stake in VimpelCom Ltd., according to people with knowledge of the matter.

Telenor is talking to potential buyers for the 33 percent stake, including Russian investors, and may sell part of the holding on the stock market if it doesn’t find a buyer, said the people, who asked not to be identified because the deliberations are private.

VimpelCom hired Morgan Stanley to help value the shares and round up bidders, the people said. No final decision has been made on the timing and structure of the deal, they said. Representatives for Telenor, VimpelCom, Morgan Stanley and JPMorgan declined to comment.

VimpelCom shares fell as much as 4.2 percent, the biggest intraday decline in more than a month. The stock fell 3.3 percent to $3.43 at 11:27 a.m. in New York. Telenor dropped 0.6 percent.

Telenor Chief Executive Officer Sigve Brekke said last month the company is in talks with possible bidders for its holding, and wants a “fair price.” “We are not dumping our shareholding,” he said in an interview at the time. Shares of VimpelCom, hurt by Russia’s economic slump and corruption allegations, have declined 33 percent in the last 12 months.

VimpelCom has been embroiled in bribery accusations related to its Uzbek unit, a scandal that will cost $795 million to settle and has led to the resignations of Telenor executives, including Chief Financial Officer Richard Olav Aa and General Counsel Paal Wien Espen. While a review by Deloitte Advokatfirma found no Telenor employees were involved in the corrupt practices, it pointed to “weaknesses in organizational structure, communication and leadership in this matter.”

Selling the stake, a move that Telenor flagged last year, would also help fund the company’s plans to expand its operations in emerging markets in Asia, such as Vietnam and Indonesia. Telenor is VimpelCom’s second-largest shareholder after LetterOne Holdings SA, which owns a 48 percent stake, according to data compiled by Bloomberg.

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