12 Nov 2009 19:46

Regulator may have concerns over Altimo deals with Telenor, TeliaSonera

MOSCOW. Nov 12 (Interfax) - The Federal Antimonopoly Service (FAS) can be expected to raise a number of concerns over separate deals Altimo has concluded with Telenor and TeliaSonera that will give it joint control over two of the "big three" mobile operators on the Russian market, VimpelCom and MegaFon .

The FAS has yet to receive documents on the new company that will receive the stakes in MegaFon held by Altimo, which manages the telecommunications assets of Alfa Group, and TeliaSonera.

Altimo and TeliaSonera announced plans on Thursday to set up a joint company that would receive their stakes in MegaFon and Turkish Turkcell. Altimo previously agreed a similar deal with Telenor to merge their stakes in VimpelCom and Kyivstar-GSM.

"At the moment we can't say anything definite since we haven't seen the documents, but this deal [with TeliaSonera] might raise a number of questions," an FAS official told Interfax.

Examination of the deal between Altimo and Telenor has been suspended. "The examination has been halted because VimpelCom is a strategic company," the official said. Altimo and Telenor have already submitted a new application to the commission on foreign investment in strategic companies, he said.

The same situation could occur with MegaFon, in which case an application would have to be submitted to the commission.

The joint company will be registered outside Russia and be listed on the New York Stock Exchange. It will have control over both MegaFon and Turkcell. The two have invited Alisher Usmanov's AF Telecom, which owns 31% of shares in MegaFon, to participate. None of the shareholders can receive control over the new company without the agreement of the others. Operationally MegaFon and Turkcell, which have over 90 million subscribers, will remain independent companies with their own management.

The scheme for TeliaSonera and Altimo is practically identical, except that it involves the merger of their stakes in VimpelCom and Kyivstar. The new company, VimpelCom Ltd., will have a listing on the NYSE. It is registered in Bermuda and will have offices in the Netherlands. Alfa group will have 43.9% of voting stock in the new company and Telenor 35.4% with a free float of 20.7%. The deal is expected to be completed in mid-2010.