Vimpelcom gets $1.4 bln from Altimo for shares conversion
MOSCOW. April 16 (Interfax) - Vimpelcom Ltd. has received approximately $1.4 billion from Altimo, which is part of Mikhail Fridman's Alfa Group, for the conversion of 128.532 million preferred Vimpelcom shares into ordinary shares, Vimpelcom reported.
"The conversion premium paid by Altimo to the company upon conversion was $10.835 per share, representing the closing mid-market price of VimpelCom American depositary receipts (ADR) on December 21, 2012, the date of Altimo's conversion notice to the company," the press release said.
"Altimo's voting percentage, which is currently 47.9%, will not increase as a result of the conversion, while its economic interest in the company will increase from 52.7% to 56.2%, based on current outstanding share and ownership percentages," Vimpelcom said.
Vimpelcom's preferred shares, like its ordinary shares, confer voting rights (the prefs are not traded and do not confer the right to receive dividends).
Altimo secured the right to convert prefs into ordinary shares last October (the same timing as envisioned by the terms of an Altimo-Telenor deal of 2009 during the formation of Vimpelcom around Russian 'big-three' telecom OJSC Vimpelcom and Ukraine's Kyivstar). In December the company notified Vimpelcom that it would carry out the conversion on April 16.
Prior to the conversion, Vimpelcom's share capital consisted of 2,061,731,135 shares, of which 1,628,199,135 were ordinary and 433.532 million prefs. After the conversion, the number of ordinary shares increased to 1,756,730,000, with an identical decrease in the number of prefs.
Vimpelcom's dividend policy is connected with the number of its ordinary shares. According to that policy, the company should earmark at least $0.8 per share and ADR (one ADR confers the right to one share), or a total of $1.3 billion, for dividends each year.
Vimpelcom's management has already said that the shares conversion will entail a revision of the company's dividend policy.
In March, Vimpelcom announced that in connection with the receipt of $1.4 billion from Altimo, it intended to pay out special dividends. It promised to confirm the size of these special dividends, as well as Vimpelcom's dividend policy, in Q2 2013.
Vimpelcom spokesman Bobby Leach said he could not comment on the potential size of special dividends pending a decision by the company's supervisory board. He did not specify when the board would meet.
Vimpelcom has already paid out $0.45 per share in a first tranche of dividend payments for 2012. It will discuss the payment of the second tranche (according to its dividend policy, that tranche should be at least $0.35 per share) in Q2 2013.
Not only Altimo, but another large shareholder in Vimpelcom - Norway's Telenor - has the right to convert prefs into ordinary shares. Telenor owns 42.95% of Vimpelcom's votes and 35.7% of its capital.
Telenor has the right to convert its own Vimpelcom prefs - 305,000 shares in all - starting in October. So far the company has not commented on its plans to convert shares. The conversion should occur by April 2016, otherwise the prefs will be cancelled and Telenor's voting stake might be reduced to 33%. If those securities are converted, Vimpelcom share capital will consist entirely of ordinary shares.
As of 6:30 p.m. Moscow time, Vimpelcom ADRs had gained 0.92% to $12.11 on the NYSE.
