Telenor Wins Step in Dispute With Russians

Telenor's office in Moscow.

Telenor's office in Moscow.

MOSCOW—Norway’s Telenor ASA won a victory in a long-running conflict with its Russian partners, but still faced the threat of losing its main Russian investment. Amid the pressure, Telenor’s partners continue to seek a settlement, according to people close to the discussions.

Telenor contends it’s the victim of a pressure campaign by the Alfa Group, a powerful oil-to-banking conglomerate controlled by a group of Russian billionaires. Alfa charges that Telenor has put its interests ahead of those of the local telecoms companies they both own stakes in—Russia’s OAO Vimpel Communications and Kyivstar in Ukraine.

Alfa is seeking a negotiated settlement, most likely involving a merger of the Russian and Ukrainian holdings into a company jointly controlled by Alfa and Telenor, according to people close to the group. Embittered after five years of battling its Russian partners, Telenor is more inclined to split the holdings, though would consider other options, officials say. The two sides are in contact regularly though it’s not clear whether or when any deal might come.

Telenor and Alfa have been fighting in courts in Russia, Europe and the U.S. for years.

Early this week, a New York judge ruled Alfa, facing tens of millions of dollars in fines for defying the court, had finally complied with rulings in a case brought by Telenor involving Kyivstar.

But in Russia, The Moscow Arbitration Court Thursday put off a decision on whether to suspend enforcement of a $1.7 billion judgment against Telenor. Russian bailiffs have already frozen Telenor’s 29.9% stake in Vimpelcom, Russia’s no. 2 mobile-phone company, in preparation for sale to cover that judgment.

To read the entire article written by GREGORY L. WHITE on online.wsj.com

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