MOSCOW-Telenor AS, a fixed, mobile, satellite and Internet services provider, will purchase a strategic ownership interest in Russian cellular carrier Vimpel-Communications, announced the companies.
According to the agreement, Telenor will acquire 25 percent plus one share of VimpelCom’s total voting stock for a cash payment of about $160 million. Proceeds will be used by VimpelCom to develop its Global System for Mobile communications network, fiber optic network and Internet services, as well as other telecommunications projects, said the companies.
Telenor could receive three of nine VimpelCom board seats in connection with the transaction.
The agreement is subject to a 75-percent majority approval by VimpelCom shareholders in addition to various Russian regulatory approvals, including the State Antimonopoly Committee of the Russian Federation, the Russian Federal Commission on the Securities Markets and the Central Bank of Russia.
The VimpelCom board of directors is recommending the terms of the transaction to its shareholders and expects to hold a special shareholder meeting in late January. The company said it expects to close the transaction by June 1.
“We believe that the infusion of capital into the company at this time will strengthen our competitive position in the Russian cellular market and will also enable VimpelCom to move faster to market with a number of new projects at a time when it is difficult for Russian companies to obtain financing,” said Dmitri Zimin, VimpelCom’s president and chief executive officer.
