VimpelCom shares frozen in Siberia

Confusion continues to reign over the ownership of second placed Russian mobile operator VimpelCom.

On Monday, Norwegian carrier Telenor said that it had received notice that a Siberian appeals court has arrested Telenor and Altimo’s (Alfa) shares in VimpelCom, amounting to almost 63 per cent of the company.

Using a ruling it obtained in Khanty-Mansiysk District Arbitration Court in Siberia, Russia, in August this year, a minority VimpelCom shareholder called Farimex Products has apparently managed to have the Siberian appeals court in Omsk issue an arrest order for the shares.

The move flies in the face of a ruling by the Khanty-Mansiysk court, which held that Altimo was not liable for any damages. Instead, the court held Telenor solely liable for VimpelCom’s alleged late entry into the Ukrainian mobile market and ordered Telenor to pay VimpelCom $2.8bn in damages.

This latest twist continues the spat begun over delays in the purchase of Ukrainian Radio Systems (URS) by VimpelCom, for which Telenor has been held responsible, although the Norwegian firm’s appeal on this point is scheduled to be heard in the Omsk court on November 18.

Jan Edvard Thygesen, executive vice president and head of Telenor’s operations in Central and Eastern Europe, said: “The timing of the arrest and the inclusion of Altimo’s shares strongly suggests that there were other motives for this arrest, and we believe this is yet another of Alfa’s collusive actions. There are already media reports that this is meant to prevent Alfa’s creditors from getting access to Alfa’s shares. If that is the case, it could limit other Russian companies’ ability to obtain loans from international banks for many years to come.”

In related news, VimpelCom said Tuesday that it has acquired 49.9 per cent of Morefront Holdings, a company that owns 100 per cent of mobile handset retailer Euroset for approximately $226m.

As part of the transaction, VimpelCom has also agreed on put and call arrangements, exercisable after three years, with respect to a further 25 per cent of the shares in Morefront, owned by Rambert Management.

Euroset operates approximately 5,100 outlets in Russia, Ukraine, Belarus, Moldova, Kazakhstan, Kyrghyzstan, Uzbekistan and Armenia.