Russian conglomerate Alfa Group’s telecoms investment arm Altimo has said that it is complying with a US court ruling in August regarding its dispute with Norway’s Telenor, its fellow shareholder in Ukrainian mobile market leader Kyivstar. Telenor owns 56.5% of Kyivstar, whilst Alfa controls 43.5% through holding vehicle Storm, and the New York Federal Court judged that Alfa must either sell its Kyivstar stake or sell certain competing assets in Ukraine. Altimo announced the group would comply with the ruling as an ‘expression of goodwill’ despite a New York appeals court granting a temporary stay order against the decision on 29 November.
Earlier this year, Telenor was forced to deconsolidate the contribution of Kyivstar from its overall group accounts due to the ongoing dispute with Altimo. The wrangling between the two has been played out in the boardroom of Russian cellco Vimpelcom, in which both firms hold stakes (Altimo 44%, Telenor 30%). In 2005, Altimo sparked hostilities by expanding Vimpelcom into Ukraine by taking over Kyivstar’s smaller GSM rival Ukrainian Radio Systems (now rebranded under Vimpelcom’s Beeline trademark). Altimo has an indirect interest in another Ukrainian GSM operator, Astelit, through a stake in Turkey’s Turkcell, and a 40% stake in WiMAX provider Ukrainian High Technologies (UHT, branded Alternet), via its Russian Technologies venture fund, and the US tribunal specifically directed Alfa to sell shareholdings in Turkcell and UHT that exceed 5%.
In a statement, Altimo said it has reduced its stake in Astelit ‘to the level permitted under the Kyivstar shareholders agreement’ [i.e. 5%], and also stated that Alfa agreed last Thursday to sell its entire stake in UHT, to Russian private telecoms investor Intec Holding. Telenor spokesman Dag Melgaard’s response to the news was muted, saying that ‘We have come to the stage where we don’t believe in anything that is said until we actually see it.’ As it stands, Telenor cannot reconsolidate Kyivstar’s financial results because of corporate management infringements; shareholder meetings and election of a full board of directors have both been suspended indefinitely as Altimo continues to boycott Kyivstar’s boardroom.
Golden Telecom, which offers fixed and mobile services in both Russia and the Ukraine, is another regional player partly belonging to the pair (Alfa 30%, Telenor 20%); last week it was reported that Vimpelcom had placed an offer to take over the company.