OSLO, Norway, May 30, 2001 (PRIMEZONE) -- Under an agreement signed today, Telenor (Nasdaq:TELN) and VimpelCom (NYSE:VIP) are forming a new strategic partnership with Eco Telecom (part of the Alfa Group of companies in Russia) to accelerate the planned regional expansion of VimpelCom's mobile operation in Russia. Eco Telecom will acquire strategic stakes in VimpelCom and its wholly owned subsidiary, VimpelCom-Region, for a total of $220 million. Telenor will maintain its strategic voting stake of 25 percent plus one vote in VimpelCom through share purchases of $24.7 million.
The investment is intended to accelerate the planned regional expansion of VimpelCom's GSM operations in Russia as well as to continue strengthening VimpelCom's position in Moscow, its primary market area. The regional expansion will be conducted through VimpelCom's separately managed subsidiary, VimpelCom-Region.
In addition to its share purchase of $24.7 million from VimpelCom and Dr. Dmitri Zimin, a founder and significant shareholder for VimpelCom, Telenor also has options to purchase a minority interest in VimpelCom-Region.
"The growth potential in Russia is very strong with a population of 145 million people and yet only 3.4 million cellular subscribers nationwide. VimpelCom is well-positioned to strengthen its role as a leading national mobile operator in Russia by combining Telenor's expertise in telecommunications with Alfa's established record of developing businesses in Russia," said Tormod Hermansen, Chief Executive Officer of Telenor.
VimpelCom also announced that Dr. Dmitri Zimin, VimpelCom's President, has stepped down from his position of General Director. Jo Lunder, former Chief Operating Officer of Telenor Mobil in Norway and current Chief Executive Officer of VimpelCom, has also assumed the position of General Director.
In connection with the agreement, Telenor and Alfa Group will nominate a slate of nine members of the Board of VimpelCom, including three independents. Telenor will nominate five directors with the fifth director nomination to be consented to by Alfa Group, and Alfa Group will nominate four directors.
Vimpelcom is the second largest mobile operator in Russia with 1,020,000 subscribers as of April 26, 2001 and a market share in Moscow of approximately 40 percent as of December 31, 2000. Vimpelcom is listed on the New York Stock Exchange.
Morgan Stanley acted as exclusive financial advisor to Telenor in connection with this transaction. Coudert Brothers provided legal advice to Telenor.
About VimpelCom
VimpelCom is a leading provider of telecommunications services in Russia, operating under the "Bee Line" family of brand names, which are among the most recognized brand names in Russia. The VimpelCom Group's license portfolio covers approximately 70% of Russia's population (100 million people), including the City of Moscow and the Moscow Region. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange . VimpelCom's Ads are listed on the NYSE under the symbol "VIP." VimpelCom's convertible notes are listed on the NYSE under the symbol "VIP 05."
About Alfa Group
The Alfa Group of Companies was established in Russia in 1988 and has evolved today into one of Russia's largest financial industrial groups. Alfa Group is active in the banking, insurance, asset management, oil and gas, real estate and retailing sectors. Alfa Eco is the group's trading and industrial arm with interests in oil, metals, mining and wholesale. Alfa Bank is one of the largest privately owned banks in Russia in terms of assets with an extensive nationwide branch network of 51 branches in 26 regions throughout Russia and 4 international branches. Alfa Bank recently acquired a strategic stake in Golden Telecom (Nasdaq:GLDN), a provider of integrated telecommunications services throughout Russia and other countries of the Commonwealth of Independent States.
About Telenor
Telenor, headquartered in Oslo is an international provider of high quality telecommunications, data and media communication services, with a particularly strong focus on mobile, Internet and broadband services. Telenor Mobile Communications (TMC) is one of the world's most advanced mobile operators with a leading position in the Norwegian market and with ownership in 15 mobile companies throughout the world. The total number of subscribers as of year end 2000 was 5.9 million; 2.3 million in Norway and 3.6 million abroad, calculated on the basis of TMC's ownership interests in each company. Telenor is listed at the Oslo Stock Exchange (TEL) and Nasdaq (TELN).
Morgan Stanley & Co. Limited, which is regulated in the U.K. by The Securities and Futures Authority Limited, is acting exclusively for Telenor and no one else in connection with the transaction and will not be responsible to anyone other than Telenor for providing the protections offered to its customers nor for giving advice in relation to the transaction, the contents of this announcement or any matters referred to in this announcement.