Altimo proposes that Telenor stop request for injunction against Vimpelcom
MOSCOW. Feb 10 (Interfax) - Altimo and Vimpelcom Ltd are offering guarantees to Telenor, which could exercise its preferred right to buy out shares in VimpelCom if the Arbitrage Court rules in favor of the Norwegian holding.
Altimo said in a statement posted on its website: "Altimo is seriously concerned with the potential damage that the recent court actions taken by Telenor can inflict on the proposed combination of VimpelCom Ltd. (VimpelCom) and Wind Telecom S.p.A. (Wind) and is willing to settle the dispute by proposing a series of undertakings in the interests of all shareholders. It's unfortunate that Telenor made an immediate application to the court without having the benefit of discussing the matter with Altimo to address its concerns."
"Altimo is confident that the proposed combination of VimpelCom and Wind will create substantial value for all VimpelCom's shareholders and therefore wishes to ensure that the shareholders meeting scheduled for 17 March 2011 to approve the transaction proceeds as originally planned by VimpelCom's Supervisory Board.
"The protection which Telenor seeks for itself in the court is too onerous for other shareholders, whose interests will be harmed, and also poses a threat to the completion of the Wind transaction which was approved by the majority of Vimpelcom's Supervisory Board with the support of its independent directors. Telenor's demand for new shares to be issued into escrow would be both dilutive for Vimpelcom's minority shareholders and deprive Vimpelcom of the use of funds for the full length of the arbitration procedure. Given these arrangements would clearly favor Telenor over other shareholders there is a real risk that Wind would abandon the transaction so denying Vimpelcom and all its shareholders of the extensive benefits of this deal. The undertakings proposed by Altimo and Vimpelcom in the letter to Telenor yesterday guarantees that Telenor will exercise its pre-emptive rights in full in case an arbitral tribunal finds in favor of Telenor. With these undertakings, Altimo believes that there is no reason for Telenor to insist on issuing common and preferred shares in escrow or demanding that VimpelCom's shareholders meeting be postponed.
"However Altimo believes the best solution would be to resolve the outstanding issues, on an urgent basis, through an expedited arbitration with final award by 7 March 2011, without the need to trouble the Court with an injunction application. This will be possible if Telenor acts in good faith to agree the expedited process so that this dispute could be settled prior to the planned shareholders meeting. Expedited arbitration is an established and proven practice and would have the benefits of providing both a solution for the issues raised by Telenor, and giving certainty over the terms of the Wind transaction, before 17 March.
Altimo's vice president Evgeny Dumalkin was quoted in the statement as saying: "As the Supervisory Board properly concluded, the Wind Transaction is not subject to pre-emptive rights and Telenor has no right to demand the issuance of new shares in VimpelCom. Altimo is confident that is will be successful in contesting Telenor's injunction application. Nonetheless, in the best interests of VimpelCom and all its shareholders we are making these proposals in order to resolve the current impasse and hope that Telenor finds them constructive and will act accordingly."