The Norwegian outfit currently owns 26.6% of the voting stock of VimpelCom and it is urging all shareholders to vote for its candidates to be appointed to VimpleCom’s board at the AGM on June 22.
The carrier claims in the letter that co-owner Alfa Group, which owns 32.9% of the voting stock of VimpelCom, is trying to undermine the minority protection of VimpelCom’s charter. It also claims that Alfa Group has violated a shareholder agreement between Telenor and Alfa Group over the nomination process for board members.
In response to this, Telenor is urging shareholders to vote for Telenor’s candidates to the board to avoid Alfa Group getting a more than half of the seats on the board.
Telenor, in its letter, said Alfa Group has been executing an aggressive, self-serving campaign to seize control of VimpelCom without paying a premium to shareholders. Telenor said shareholder votes for its two board nominees would help block Alfa efforts to take control of VimpelCom,
Alfa Group is an industrial conglomerate controlled by Mikhail Fridman, a billionaire businessman and one of Russia’s wealthiest men.
There has been bad blood between Telenor and Alfa Group for several months now, and they have clashed repeatedly over the future direction of the mobile operator. They have also clashed over VimpelCom’s proposed acquisition of Ukraine mobile operator WellCom for approximately $200m, a move Telenor disagrees with, saying it has no business merit and would destroy shareholder value.
It is well known that both Telenor and Alfa Group want to raise their holdings in VimpelCom, and they have even asked Russia’s Anti-Monopoly Service for permission to boost their stakes in the company (Telenor to 45% and Alfa to 60%). Over 40% of VimpelCom is thought to be currently owned by public shareholders.
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Later in the letter, Telenor threatened to quit VimpelCom if its shareholders fail to answer its plea and block Alfa’s control. If Alfa were to gain control of the Board and succeed in its efforts to remove the minority protections in VimpelCom’s charter, we might consider exiting VimpelCom, Telenor warned in its letter.
