Uzbek Regulator Allows Vimpelcom to Acquire Golden Telecom

TASHKENT, Feb 01, 2008 (AsiaPulse via COMTEX)

The State Committee of Uzbekistan for Demonopolisation, Support of Competition and Entrepreneurship of the Republic of Uzbekistan has approved the acquisition of 100 per cent shares of Golden Telecom by the Russian VimpelCom.

Golden Telecom has a more than 54 per cent share in Buzton JV (Tashkent) one of the leading alternative communication operators in Uzbekistan. Other founders of Buzton are the national operator UzbekTelecom and the United State's NCI Projects International Inc. VimpelCom in turn has the second largest share in Unitel LLC, a mobile operator in Uzbekistan.

The Federal Anti-Monopoly Service (FAS) of Russia has allowed VimpelCom to sign the deal on the acquisition of Golden Telecom. On 14 January the agency approved the petition of its subsidiary, Lillian Acquisition, to acquire the Russian subdivisions of Golden Telecom.

For the deal to be completed, VimpelCom had to get the approvals of the state antimonopoly agencies of the countries where Golden Telecom operated. Two of them are the Central Asian nations of Uzbekistan and Kazakhstan.

The Antimonopoly Committee of Uzbekistan said VimpelCom submitted a request for the acquisition of Golden Telecom on 18 January 2008. The Uzbek regulatory agency was the first to respond: according to the legislation of Uzbekistan, the decision on the request had to be made within 10 working days from the day of submission.

VimpelCom plans to submit the same type of request to the authorised agency of Kazakhstan as soon as possible. The agency should receive the application within the next seven days. According to Kazakh regulations the authorised agency is allowed 30 days to produce a decision, but this period may be extended to 60 days, Golden Telecom said.

Apart from the two Central Asian countries, VimpelCom also submitted a request to the Antimonopoly Committee of Ukraine on 17 January. The regulatory agency is allowed to prolong the time allowed for consideration of the request for as long as three months, to study the details of the deal.

On 18 January VimpelCom sent the shareholders of Golden Telecom an official offer to acquire 100 per cent of their shares at the price of US$105 for a share. The offer is valid until 15 February 2008. In order to complete the deal VimpelCom will have to collect 63.3 per cent of GT's shares. For this, it only needs to agree with the main shareholders of the Holding: Russian Altimo (26.6 per cent), Norwegian Telenor (18.3 per cent), RosTelecom (11 per cent), and Inure Company (8 per cent).

After the closure of the offer, the unsold shares of Golden Telecom will be converted into the right of acquisition for US$105 for a share and annulled.

The acquisition of Golden Telecom by VimpelCom (Beeline) will have no effect either on future acquisitions of the latter nor the size and the policy of its dividends. This was stressed by the Director General of VimpelCom Alexander Izosimov during a telephone conference. He said that the low level of his company's debt allows it to continue to make new acquisitions if needed.

Izosimov noted that the acquisition of the Golden telecom would allow VimpelCom to save about US$470 million within the next three years through the savings on capital investments and operational expenses. Moreover, as a result of the integration of the two companies VimpelCom's revenue is likely to grow not only through the inflow of new clients, but also through additional payments for new services which will be made available to the existing clients after the acquisition, he added.

According to Uralsib analysts, the results of the telephone conference with Izosimov turned out to be as expected, and consequently, the experts have not changed their opinion that the deal is unlikely to bring VimpelCom any income growth, RBK wrote. At the same time, the businesses of VimpelCom and Golden Telecom may become mutually complementary, as VimpelCom holds a strong position in the retail services market, and Golden Telecom in the corporate services market.

The VimpelCom Group includes mobile operators providing services in Russia, Kazakhstan, Ukraine, Tajikistan, Uzbekistan, Georgia, and Armenia. The licenses of the VimpelCom group of companies for the provision of GSM and 3G standard services cover the territory populated by some 250 million people. The Norwegian Telenor company has 29.9 per cent voting shares in VimpelCom and Altimo (formerly Alfa-Telecom) 44 per cent.

Golden Telecom is the supplier of integrated telecommunication and Internet services in the largest cities of Russia and the CIS, that have their own resources and communication facilities. The company's main shareholders are Alfa-Group (29.5 per cent) and Norway's Telenor (20.2 per cent).

(UzReport)

Source: TradingMarkets.com