Telenor withdraws VimpelCom arbitration claim

Telenor (OSE: TEL)) has agreed to purchase 234 million preferred VimpelCom shares from Weather Investments II S.a.r.l.(Weather) for 374.4 million USD. This will push Telenor’s voting share up to 36.36% taking into account certain options arrangements pertaining to the remaining 71 million preferred shares that Weather maintains.

Telenor will thus achieve a voting position it was seeking for in an arbitration process launched against Altimo Holdings & Investments Ltd., Altimo Cooperatief U.A. and VimpelCom Ltd to protect against a dilution resulting from cash and shares deal by the Russian mobile operator for telecom assets from an Egyptian businessman.

Telenor had been asking Vimpelcom to issue new shares to maintain the ownership in what it considers a strategic investment. Without the transaction or other solution, Telenor’s ownership voting power would have been just 25% where as Altimo and Weather would have held a majority together. As an example, after the transaction Telenor + minorities have just over 50% of votes. The Norwegian company will seek to extends VimpelCom’s board to 11 members.