Telenor to offer 8% in Vimpelcom, may place $1 bln in bonds convertible into Vimpelcom ADS
MOSCOW. Sept 12 (Interfax) - Norwegian telecom holding Telenor plans to offer 142.5 million Vimpelcom Ltd ADS on the market, Vimpelcom said in a press release.
The offering amounts to 8.11% of Vimpelcom share capital and 24.54% of Telenor's stake in the Dutch-registered company (580,578,840 shares). Each Vimpelcom ADS represents 1 ordinary share.
Vimpelcom does not specify the trading floor where the shares will be offered, while a Telenor press release says the placement will be held in the U.S.
The Vimpelcom securities are currently traded on Nasdaq, where they closed at $3.9 each on September 9. In other words, the current market value of the stake to be offered is $555.75 million.
Morgan Stanley and J.P. Morgan will act as joint global coordinators and joint bookrunners and Citigroup and Credit Suisse will act as joint bookrunners for the offering.
The offer price has not been determined yet. It will be announced once formation of the bid book has been completed.
Telenor intends to grant the underwriters an option to purchase up to 21,375,000 additional ADSs at the offering price, less underwriting discounts and commissions.
Before pricing of the ADS offering, Telenor may also launch a three-year bond exchangeable into Vimpelcom ADSs totaling up to $1 billion, with an exchange premium that could be up to 35%, Vimpelcom said.
Vimpelcom will not receive any proceeds from the sale of the ADSs by Telenor, and Telenor's sale of the ADSs will not result in dilution of the company's issued and outstanding share, the company said.
Telenor said at the end of last year that it wanted to sell its 33% stake in Vimpelcom, giving as reasons that Telenor holds a minority position without the possibility to fully control the company and that Vimpelcom's contribution to Telenor's core business has gradually declined.
But the market reckons the real reason was a corruption probe by U.S. and Dutch regulators into Vimpelcom's business in Uzbekistan. The affair cost several Telenor executives their jobs and Jo Lunder, the former Vimpelcom CEO, even had to spend a few days in custody in Norway.
In its second-quarter financial statement, Telenor lists Vimpelcom as an associated company that generated a loss of NOK2 billion (about $237 million).
Vimpelcom's biggest shareholder, with a 47.9% stake, is LetterOne, part of Alfa Group, which is controlled by Mikhail Fridman and his business partners. Fridman told journalists in April that Alfa does not plan to purchase Telenor's Vimpelcom stake.
