Filed
by Altimo Holdings & Investments Ltd.
This
communication is filed pursuant to Rule 425 under the Securities Act of 1933, as
amended.
Subject
Company: Open Joint Stock Company “Vimpel-Communications”
Commission
File No.: 1-14522
13.11.2009
The
Kremlin's Communication Agent - RBK Daily
Mikhail
Fridman personally discussed Altimo's transactions with Telenor and TeliaSonera
in the Kremlin and with the government
While
Dmitry Medvedev was calling for "comprehensive" modernization in Russia in his
Address to the Federal Assembly, Alexey Reznikovich, head of the Russian company
Altimo, which manages Alfa Group's telecommunications assets, spoke of a new,
earthshaking transaction in the telecommunications industry. Following
VimpelCom's merger with Kyivstar, announced one month earlier, Alfa has
announced a new agreement. It has proposed to Scandinavian TeliaSonera the
establishment of a new telecommunications giant on the basis of Russian MegaFon
and Turkish Turkcell.
As he
described this transaction, worth tens of billions of dollars, Mr. Reznikovich
was reluctant to link it to the earlier agreement with Telenor. "We worked long
and hard to settle both conflicts, and it just so happened that these multiyear
disputes were ended at the same time," he said yesterday during a conversation
with journalists, without answering the key question: what caused such an
interesting coincidence. As recently as September, Alfa's new global partners
were still its sworn enemies.
Meanwhile,
according to RBC Daily's sources, behind the transaction is the government's
long-time dream of establishing a global company which could serve as a "tidbit"
for international investors. Following the failed idea of saving "unsavable"
Opel and the attempt to gain access to European aerospace technology by
acquiring of 5% of EADS shares, the government needed an industry which had been
bruised and battered less than others by the unstable economic
situation.
Communication
was the perfect thing
And in
the heat of the conflict between Telenor and Altimo, the government turned its
gaze on the latter's business. Mikhail Fridman, the head of Alfa Group, which
controls Altimo, was invited to the Kremlin to meet with Vladimir Putin and
Dmitry Medvedev to "discuss urgent issues."
"The
Kremlin's position was that the conflicts with Telenor and TeliaSonera must be
resolved as soon as possible since they negatively affect Russia's image in the
West. According to the head of state, all these disputes reduced the
attractiveness of investing in Russia, especially during the crisis when the
government is counting on foreign investment," said an RBC Daily source close to
Alfa Group. According to this source, a future merger of the companies
controlling VimpelCom and Kyivstar and MegaFon and Turkcell could provide the
government with a major telecommunications company operating in Russia, the CIS
and Asia.
This
option should be the most attractive one for the Kremlin, because the
shareholders of all four companies are interested in expansion into emerging
markets, primarily in Asia and Africa. "The government intends to try again to
establish a major international player in the telecommunications sector, one
that would be the major operator in Eurasia. Especially since this is a business
in a high-technology sector," says a source familiar with both
transactions.
According
to IC Veles Capital, the four operators' current aggregate capitalization is $55
billion. This is more than sufficient to become one of the top three European
telecommunications companies. Number one in the E.U., Vodafone, is currently
worth about $72 billion, France Telecom is worth $45.8 billion and Deutsche
Telekom is worth $42.1 billion.
The
only thing that could cast a shadow over Mikhail Fridman's happiness about these
two transactions is the government's requirement that all major decisions in the
merged companies be made in Russia.
VimpelCom
Ltd., controlling VimpelCom and Kyivstar, will be registered in Amsterdam. The
joint Altimo and TeliaSonera project will also be registered in the West, said
Mr. Reznikovich yesterday. However, the government hinted to Alfa that the main
decisions related to the merged operating company should nevertheless be made in
Russia.
"The
government believes the decision-making center of the new major operator should
be located in Moscow," says a source familiar with the government's plans. "Only
then would it make sense to promote the establishment of a major operator. With
Opel, Russia would have at least received new technology that could not be
developed independently. But people know how to develop telecommunications in
our country."
"Indeed,
establishing a major operator makes sense for the government only if the
decision-making center is in Russia," says Veles Capital analyst Ilia Fedotov.
But in that case Alfa would be faced with the difficult process of getting
approval from Telenor and TeliaSonera, which might not be thrilled with such an
idea.
Another
influential businessman, Alisher Usmanov, was left out of the transaction. АF Теlecom,
MegaFon's third shareholder, which is controlled by the
businessman, does not share its partners' optimism with respect to the
merger.
"Assessing
the transaction's prospects, we believe that merging the interests in MegaFon
and Turkcell owned by Аltimo and
TeliaSonera will not lead to an increase the Russian operator's
capitalization. According to our forecast of the merged company's future
financial indicators, we see practically no synergies from the merger," say
sources at АF
Telecom.
Alisher
Usmanov's representatives are not prepared to discuss the transaction with
TeliaSonera in more detail. Formally, it has not yet been
completed.
Altimo
and TeliaSonera own 25.1% and 43.8% respectively of the shares in MegaFon and 5%
and 37% respectively of the shares in Turkish Turkcell.
Altimo
and Telenor own 44% and 30% respectively of the shares in VimpelCom and
43.5% and 56.5%
respectively of the shares in Ukranian Kyivstar.
___________________________________________________________________________
This
communication is for informational purposes only and does not constitute an
offer to purchase, sell, or exchange or the solicitation of an offer to sell,
purchase, or exchange any securities of OJSC VimpelCom or
VimpelCom Ltd., nor shall there be any offer, solicitation, purchase, sale
or exchange of securities in any jurisdiction in which such offer,
solicitation, purchase, sale or exchange would be unlawful prior to the
registration or qualification under the laws of any such jurisdiction. The
publication or distribution of this communication may, in some countries, be
restricted by law or regulation. Accordingly, persons who come into possession
of this document should inform themselves of and observe these restrictions. To
the fullest extent permitted by applicable law, Altimo Holdings &
Investments Ltd. (“Altimo”), any of its affiliates and all the abovementioned
companies disclaim any responsibility or liability for the violation of such
restrictions by any person.
The
solicitation and the offer to purchase shares of OJSC VimpelCom’s common stock
or preferred stock or ADRs representing shares of OJSC VimpelCom’s common stock
will only be made pursuant to an offer to purchase and related materials that
are intended to be filed with the SEC and a voluntary tender offer statement
prepared in compliance with applicable Russian law.
Altimo intends for VimpelCom Ltd. to
file a registration statement and tender offer statement, together with other
related materials, with the SEC in connection with the proposed transactions.
Information regarding the participants in the proposed offer and a description
of their direct and indirect interests, by security holders or otherwise, will
be contained in the relevant materials to be filed with the SEC when they become
available.
ALTIMO URGES OJSC VIMPELCOM
SHAREHOLDERS TO READ THESE MATERIALS REGARDING THE POTENTIAL OFFER CAREFULLY
PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO THE OFFER, IF AND WHEN THESE
MATERIALS BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION,
INCLUDING THE TERMS AND CONDITIONS OF THE OFFER.
OJSC
VimpelCom shareholders will be able to obtain a free copy of such materials
without charge at the SEC’s website at (http://www.sec.gov) and from the
information agent named in such materials once they have been filed with the
SEC.
Cautionary
statement regarding forward-looking statements
This
announcement contains “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts, including statements concerning the
anticipated timing of filings and approvals relating to the proposed
transactions; the expected timing of the completion of the proposed
transactions; the expected benefits and costs of the proposed transactions;
management plans relating to the proposed transactions; the ability to complete
the proposed transactions in view of the various closing conditions; the
possibility that the proposed transactions may not be completed, any projections
of earnings, revenues, synergies, accretion, margins or other financial items;
any statements of operations, including the execution of integration plans; any
statements of expectation or belief; and any statements of assumptions
underlying any of the foregoing. Any statement in this announcement that
expresses or implies Altimo’s intentions, beliefs, expectations or predictions
(and the assumptions underlying them) is a forward-looking statement.
Forward-looking statements involve inherent risks, uncertainties and
assumptions, including, without limitation, risks related to the timing or
ultimate completion of the proposed transactions; the possibility that expected
benefits may not materialize as expected; that, prior to the completion of the
proposed transactions, OJSC VimpelCom’s business or Kyivstar’s business may not
perform as expected due to uncertainty; that the parties are unable to
successfully implement integration strategies or otherwise realize the synergies
anticipated for the proposed transactions; and other risks and uncertainties
that are beyond the parties’ control. If such risks or uncertainties materialize
or such assumptions prove incorrect, actual results could differ materially from
those expressed or implied by such forward-looking statements and assumptions.
The forward-looking statements contained in this announcement are made as of the
date hereof, and Altimo expressly disclaims any obligation to update or correct
any forward-looking statements made herein due to the occurrence of events after
the issuance of this announcement.