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
Recognizing
the Outsiders - Vedomosti
The
same deal was made with TeliaSonera as with Telenor: joint telecommunications
assets merged into a single company
Alfa
Group and TeliaSonera merge their telecommunications assets
Alfa Group
co-owner Mikhail Fridman's long-time dream of establishing a major Eurasian
cellular operator has come true. Alfa has even agreed to establish two such
companies – one with Norwegian Telenor and one with Swedish-Finnish
TeliaSonera.
Yesterday Altimo,
which manages Alfa's telecommunications assets, and TeliaSonera announced they
would establish a joint company to which they would contribute their
shareholdings in MegaFon and in Turkcell, the largest Turkish cellular operator.
The new company will be registered "in a country in the West," listed on the New
York Stock Exchange and will hold "the majority of shares" in MegaFon and
Turkcell. Most likely, the company will be registered in Bermuda or Luxembourg
and headquartered in the Netherlands, said a source close to TeliaSonera. This
will allow the company to save on taxes and to improve the quality of its
management.
The merger of
Altimo's and TeliaSonera's shareholdings in MegaFon would automatically provide
control. But the combined company will receive control of Turkcell only if
Altimo and TeliaSonera are able to win 13.8% of the company in a court case
against the Turkish Cukurova Group. In 2005, the latter promised 53% of the
shares of Turkcell Holding (equivalent to 27% of Turkcell) to TeliaSonera but
sold a part of that shareholding to Alfa. Now Altimo is requesting from Cukurova
the remaining shares, which are pledged as collateral for a $1.7 billion loan.
The Turkish group has committed over 15 defaults under the loan agreement, said
Altimo CEO Alexey Reznikovich yesterday.
Altimo and
TeliaSonera are fighting for the same shares of Turkcell, so they decided to go
to court together, TeliaSonera CEO Lars Nyberg told Vedomosti. Settlement of the
dispute with Cukurova is "the first and fundamental condition" of establishing
the combined company, notes Reznikovich. A Cukurova representative did not
comment on the situation.
MegaFon's third
co-owner, Alisher Usmanov's AF Telecom Holding, has been also invited to join
the partnership. If he accepts the invitation, the interest held by Russian
shareholders in the charter capital of the combined company would approximately
equal TeliaSonera's share, Reznikovich said; if Usmanov rejects it, the
Scandinavians would have an economic advantage, but the parties would have
parity on the board of directors. This is the arrangement, stressed
Nyberg.
AF Telecom
announced yesterday that it had received no specific offers yet, but that it
doubted that the merger of
Аltimo's and TeliaSonera's assets would help increase MegaFon's
capitalization: there is practically no visible financial effect from the
merger. "Only a part of the shareholders would benefit from this proposal," the
announcement said. AF Telecom is more interested in cooperation with
Svyazinvest. Sources told Vedomosti that
Usmanov is consulting with the Ministry of Communications about
the possibility of exchanging his MegaFon shares for a share in the combined
state operating company to be established by Svyazinvest.
Merging MegaFon
and Turkcell will give shareholders a liquid asset with a high quality of
corporate governance, responds Nyberg. Moreover, Reznikovich believes the
company would have good prospects for developing abroad, for example in Africa
and the Middle East.
Just a month ago
Altimo entered into a similar transaction with Telenor, its partner in VimpelCom
(Altimo and Telenor own 44% and 29.9% respectively) and Ukrainian Kyivstar
(43.5% and 56.5% respectively). Altimo and Telenor will contribute
their shareholdings in both operators to Vimpelcom Ltd., which has already been
registered in Bermuda, provided they receive approval from the regulatory
authorities. The agreement was preceded by five years of conflict and legal
proceedings between Altimo and Telenor.
Discussions
between TeliaSonera and Altimo also took a few years, Nyberg says, and
discussions on the current option of an asset merger began approximately a year
ago. TeliaSonera made its final decision on the transaction when it learned of
Altimo's agreement with Telenor, he says: "This was proof for us that Altimo had
decided to put an end to disputes and conflicts and was looking for a productive
partnership." The two transactions are not related directly, says Reznikovich,
it is just that after five years all parties are tired of the
conflicts.
The agreements
with Telenor and TeliaSonera were signed after the Russian government asked Alfa
to put an end to these conflicts, which were spoiling Russia's image, and to
focus on the expansion of Russian business abroad, says a source close to Alfa
Group. Reznikovich "knows nothing about the government's possible involvement in
the preparation of the transactions," and the Russian Prime Minister's Press
Secretary Dmitry Peskov affirmed that the government was not involved in the
settlement of Altimo's disputes with Telenor and TeliaSonera.
It will soon
become clear whether the government will support the transactions: both
VimpelCom and MegaFon are on the strategic assets list, and a transfer of their
shares to foreign companies will require approval from the government commission
on foreign investments. Reznikovich does not expect any problems: after all, the
structure of MegaFon's and VimpelCom's ultimate beneficial owners will not
change, and the rights of Russian shareholders "will at the very least not
suffer" as a result of the transactions. According to Reznikovich, Altimo has
already discussed the transactions with the government and "has not seen any
obstacles; on the contrary, there is serious support."
Peskov could not
predict the decision of the foreign investments commission.
In summer of 2005,
Mikhail Fridman set a goal for Alfa: to establish, with help of Western
partners, a Eurasian cellular operator analogous to Vodafone. If the
transactions with Telenor and TeliaSonera are completed, there would be even two
such operators, Reznikovich stated yesterday. He believes that it would not be
possible to take the next step and to merge these companies: Telenor and
TeliaSonera are global competitors and would hardly get along with each other
within a single company, and the Federal Antimonopoly Service (FАS) would never
approve a merger of VimpelCom and MegaFon. Such a merger would create an
operator with a market share far beyond what is considered dominant, points out
Konstantin Senichkin, a department head at FAS.
___________________________________________________________________________
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.