MOSCOW (AP) — Russian bailiffs said Monday they are preparing to sell most of Norwegian telecom company Telenor’s 29.9 percent stake in VimpelCom, Russia’s No. 2 mobile phone operator, to recover $1.7 billion owed in damages.
“The shares will be transferred in the near future for sale at auction,” the bailiffs’ press office said in a statement on its Web site.
Bailiffs seized a 26.6 percent stake in March after Telenor refused to carry out a Siberian court order to pay VimpelCom $1.7 billion in damages related to a years-old acquisition. The suit was brought by Farimex Products, an obscure shareholder with a tiny stake in Vimpelcom, which has accused Telenor of delaying Vimpelcom’s entry into Ukraine.
The move ramps up the pressure on Telenor as it battles to save its Russian investment.
Telenor reacted angrily to the announcement, saying it would be “outrageous” to sell the shares before the conclusion of the appeal process. A court in the Siberian city of Tyumen is to hear Telenor’s appeal on Wednesday.
“Even though the threat of a sale of Telenor’s shares in VimpelCom has been there all the while since the shares were arrested, we expect that the bailiff will halt any plans of a sale or auction until the claim has been heard by all necessary court instances,” said Jan Edvard Thygesen, head of Telenor’s Central and Eastern European operations, in a statement.
“It would be outrageous if the bailiff’s office should go ahead with a sale now.”
Analysts say that Farimex’s suit is part of a wider battle for control between Telenor and billionaire Mikhail Fridman’s Alfa Group, the other main shareholder in VimpelCom, over their joint assets in Russia and Ukraine. It is fast emerging as a test case for President Dmitry Medvedev’s commitment to the rule of law in Russia.
Telenor has accused Alfa of using its influence in Siberian courts to bring the suit under the guise of Farimex, but Alfa has denied that it has any connection to the offshore company. Alfa is pursuing an almost identical case against Telenor in Geneva.
Farimex has insisted it has pressed only for compensation to VimpelCom.
“This process is now out of our hands,” Dmitry Chernoi, a lawyer for Farimex, said Monday. “It’s in the hands of the bailiffs.
“We’ve said several times that we want VimpelCom to get the money, and we don’t mind how they get it.”
Filed Under: Industry regulations