Russian buy-out

Vimpelcom, the number two operator in Russia, is in talks with private equity vehicle Altimo and Norway’s Telenor on buying their holdings in fixed-line operator Golden Telecom according to local reports.

Vimpelcom is owned by Telenor (29.9 per cent) and Altimo (24.5 per cent). These two companies do not get along and the public spats have become par for the course.

Altimo’s smaller holding gets it 35.8 per cent of the voting shares, while Telenor’s greater ownership stake allows it only 26.6 per cent.

The Russian market has reached saturation point. Local operators are finding the international market tough in terms of expansion. Seeking a fixed solution is one strategy for future mid-term growth.

However, the largest threat to Vimpelcom, quite possibly, is the inability of its two principle shareholders to co-exist peacefully, as both have sought to gain control of the operation.