Telenor Group said it is to divest its entire 33 percent stake in VimpelCom and fully focus on creating value in its core operations. Svein Aaser, chairman of Telenor's board of directors said its minority stake and lack of ability to fully control Vimpelcom had been challenging. As a result of today's announcement, Telenor will not convert its VimpelCom preference shares into common shares.
The Vimpelcom stock declined in the third quarter and ended at USD 4.11 per share compared with the book value of USD 5.64. Because of the intention to divest, impairment evaluations in future will be based on the market price of the Vimpelcom share. This will result in a non-cash impairment of approximately NOK 7.5 billion in the third quarter.
Telenor said VimpelCom has gradually contributed less to the value of the group. Today, the market value of the VimpelCom shares represents approximately 8 percent of Telenor's market capitalisation. Telenor has invested NOK 15 billion in VimpelCom and received NOK 20 billion in dividends. The current market value of the ownership stake is approximately NOK 20 billion.
Telenor will explore every option to divest its shares in VimpelCom and will seek the best resolution for the group and its shareholders. A time frame for the divestment has not been set.
