Alfa Group says no plans to sell stake in VimpelCom

MOSCOW, February 15 (RIA Novosti) - One of Russia's leading financial and industrial holdings said Wednesday it had no plans to sell its stake in the country's second largest cell phone operator.

Alfa Group Chairman Mikhail Fridman said the company was not intending to sell its stake in VimpelCom (RTS ticker: VIMPG) to end a bitter battle with the operator's second core shareholder, Norway's telecommunications giant Telenor.

"We are not prepared [to do so]," Fridman said.

The Alfa Group head declined to give any specific date of resolving the dispute with the Norwegian telecom firm.

The conflict between Telenor and Alfa Group erupted over VimpelCom's plans to enter the Ukrainian cell phone market. Alfa Group supported a VimpelCom deal to acquire Ukrainian Radio Systems, a leading cell phone operator in Ukraine. However, Telenor was against the deal saying it was overpriced. The deal was struck in the fall of 2005 and in January 2006 Telenor filed three lawsuits with a Moscow arbitration court against VimpelCom to challenge the deal.

Recently VimpelCom sent an offer to Telenor and Altimo, the telecoms arm of Alfa Group, to buy a 100% stake in Kyivstar GSM, another Ukrainian mobile operator, to end the dispute. Telenor and Alfa Group are the core shareholders of Kyivstar. If the deal is approved, VimpelCom intends to merge two Ukrainian operators into one business.

VimpelCom is best known for the Beeline trademark, one of Russia's most popular mobile operators. Telenor holds 26.6% of shares in VimpelCom, whereas Russia's leading private equity group Altimo (previously named Alfa Telecom), the telecoms arm of financial and industrial holding Alfa Group, holds a 32.9% stake.