Telenor starts VimpelCom share sale

Alan Burkitt-Gray
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Telenor aims to raise $550m in first stage of plan to divest all of its stake in VimpelCom

Telenor has started to sell 8.1% of VimpelCom’s shares, reducing its holding from 33% to 24.9%, as the first stage in the process to sell its entire holding.

The company has started a public offering of 142.5 million of the American Depository Shares (ADSs) in VimpelCom that it holds. Telenor may sell as many as 21.3 million ADSs on top of that figure to underwriters.

VimpelCom’s ADSs are listed on Nasdaq in the US. Shares traded on Thursday 8 September at about $4.18, but they dropped in advance of Telenor’s announcement on Friday to close at $3.90.

Telenor has not yet determined the price at which it plans to sell the ADSs. But if it sells at the current price it should raise more than $550 million for the initial 142.5 million ADSs.

The company said: “This transaction follows Telenor’s announcement on 5 October 2015 of its intention to divest its stake in VimpelCom.” Telenor has not set a deadline for its eventual sale of all its stake.

Morgan Stanley and JP Morgan will act as joint global coordinators and joint lead bookrunners, and Citigroup and Credit Suisse will act as joint bookrunners for the offering.

The Norwegian operator added: “Telenor will not comment beyond today’s announcement at this point in time. The pricing of the offering will be announced following the completion of the bookbuilding process.”

Telenor confirmed as recently as August 2016 that it was still looking to sell the whole of its stake in VimpelCom. A former CEO of Telenor, Jon Frederik Baksaas, left the company shortly after it asked Deloitte to conduct an external review of its handling and oversight of its stake in VimpelCom.

VimpelCom is controlled by Russian businessman Mikhail Fridman through his LetterOne investment group. It owns Wind in Italy, Beeline in Russia, Armenia, Kazakhstan and other countries, Djezzy in Algeria, and a number of other businesses.

Telenor said it planned to sell the stake after its discomfort with a bribery scandal in Uzbekistan, which it settled in February by paying $795 million in the Netherlands – where VimpelCom is registered – and the US.

The previous CFO, Richard Olav Aa, was suspended in November 2015 during the investigation into its stake. Jørgen Rostrup, a Norwegian who is president of Yara North America, will become the new CFO later this year.