Ukrainian businessman Pinchuk's EastOne buys Vimpelcom prefs
MOSCOW. Jan 10 (Interfax) - Investment consulting group EastOne, which belongs to Ukrainian businessman Victor Pinchuk, has announced its acquisition of 123.6 million preferred shares (5.995% of shareholder capital) of Vimpelcom Ltd.
The direct purchaser of the shares was the company Bertofan Investments Ltd., which is under EastOne's mandate, the announcement said.
"The transaction was made in the framework of EastOne group's portfolio strategy, envisaging, in particular, investment in a number of key investment-attractive industries," the announcement said.
"The completion of the deal will provide the purchaser with the opportunity to invest in a strategically attractive industry and to join the ranks of the major shareholders in Vimpelcom Ltd., which has significant growth potential," the announcement said.
Vimpelcom previously said that Bertofan had purchased preferred shares from the Cyprus offshore company Forrielite Ltd., which represents the interests of Rusnano Deputy CEO Oleg Kiselev. Forrielite and Bertofan wrapped up the deal on December 30, 2011 at a price of $111 million. In the summer of last year, Kiselev shelled out $101.35 million for that same stake.
Vimpelcom did not disclose Bertofan's ultimate beneficiaries, saying only that the company is indirectly owned by the Isle of Man registered Caravaggio Trust and Vermeer Trust.
The sold stake accounts for 28.5% of the total number of preferred shares in Vimpelcom Ltd. If it were to convert preferred shares into ordinary shares now, Bertofan would own 7.0559% of Vimpelcom's ordinary shares (assuming that only the indicated stake were converted).
Kiselev voiced the idea of converting Vimpelcom preferred shares into ordinary shares at the beginning of November 2011. At that time, he told Interfax that he believed in the growth of Vimpelcom's capitalization. "I expect to sit on these shares for more than one year," he said.
Vimpelcom's preferred shares have the option for conversion into ordinary shares. This opportunity will present itself for the shares held by Kiselev in 2012. The option requires the holder of the preferred shares to pay the equivalent market price of Vimpelcom ordinary shares at the time of the conversion.
Vimpelcom preferred shares are not traded on the exchange, and dividends are not paid on them, but they have voting rights equal to ordinary shares.
Forrielite acquired Vimpelcom preferred shares from Altimo (manages Alfa Group's telecommunications assets) in June of last year. The deal provoked protest from Telenor, Alfa's Norwegian partner, since it enabled Altimo to reduce its voting stake in Vimpelcom to 24.9981% (below 25%) and move to dissolve the shareholder agreement of Vimpelcom Ltd.
Later, Telenor learned that the company that provided Forrielite with a loan to purchase the preferred shares belongs to Alfa co-owners Mikhail Fridman, German Khan and Alexei Kuzmichev. In response, Altimo and Kiselev assured Telenor that the purchase of the Vimpelcom stake was a personal investment by Rusnano's top manager.
Alfa also told Interfax that it has no relation to the deal between Kiselev's structure and EastOne.
Pinchuk and Alfa Group have no business together, the company said.
EastOne did not comment on the deal with Kiselev on Tuesday. Kiselev was not available for comment.
Several Ukrainian mass media sources have said that Pinchuk is on friendly terms with Fridman. EastOne also intersects with Alfa in the corporate field. In 2009, Pinchuk sold his stake in the Lisichansk oil refinery to TNK-BP , which is co-owned by Alfa Group.
The portfolio under EastOne's mandate covers over 20 businesses in Ukraine, including a pipe-wheel company Interpipe, oil and gas company Geo-Alliance, and media assets (the television group StarLightMedia, which manages the channels Novy, ICTV, STB, as well as the satellite television channel QTV and musical entertainment channels M1 and M2; the newspaper Facty y Kommentarii; and the publication Economica (the journal InvestGazeta, the newspaper Delo, TOP-100 and others)).
The main shareholders in Vimpelcom Ltd. are Nagib Sawiris' Weather Investments with 29.6% of the voting shares (an 18.8% economic interest), Telenor - 25% (31.7%), Altimo (controlled by Alfa-Bank) - 24.99% (31.55%) and Forrielite Ltd, which is controlled by Kiselev - 5.99% of voting shares.
Companies in the Vimpelcom Ltd Group provide cellular services to over 200 million subscribers in 19 countries. Vimpelcom's largest assets are Russian Vimpelcom, which accounts for 39% of the group's total revenue, and Wind Italy (31%).