Norwegian telecoms group Telenor has threatened to exit Russia's Vimpelcom over an ownership battle with Alfa Group, but analysts were hopeful of a solution that would benefit investors in Russia's No.2 mobile phone firm.
In a letter to Vimpelcom shareholders on June 06, Telenor, which owns 26.6 percent of the voting stock, asked Vimpelcom shareholders to block Alfa Group's attempts to win control, saying it would exit the firm otherwise.
Telenor accused the Russian conglomerate of violating shareholders' rights with an "aggressive, self-serving campaign" to seize control of the firm without paying a premium to them. If Telenor quits Vimpelcom, that would leave Alfa Group as potentially the only big shareholder and undermine the corporate governance rating at the company. "If Alfa were to gain control of the Board and succeed in its efforts to remove the minority protections in Vimpelcom's charter, we might consider exiting Vimpelcom," Telenor said in its letter.
"There have been instances in which Telenor, and, in some cases, its largest shareholder, the Norwegian state, have assisted Vimpelcom in resolving problems it has encountered in Russia.
"If Telenor were to exit Vimpelcom, Vimpelcom and its shareholders would no longer have the benefit of such assistance. To prevent Alfa from obtaining de facto control of Vimpelcom, we need your help."
Alfa Group, controlled by oligarch Mikhail Fridman - ranked by Forbes magazine as Russia's second richest man - and Telenor have been fighting boardroom battles over Vimpelcom's future expansion, particularly into the fast-growing Ukrainian market.
Vimpelcom shares closed 1.7 percent lower at $33.75 in New York on Monday. Telenor and Alfa Group both want to raise their holdings in Vimpelcom and have asked Russia's markets regulator for permission to boost their stakes - Telenor's to 45 percent and Alfa's to 60 percent from 32.9 percent.
Telenor asked Vimpelcom shareholders to vote in favour of its independent nominees, Jo Lunder and Terje Thon, to the board of directors at a meeting on June 22 - a move it said would help block Alfa's efforts to take control.