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Vimpelcom in talks with Sawiris, Q2 misses f’cast
CEO confirms talks on Orascom, Wind.
September 2, 2010 3:22 by Reuters
The head of Vimpelcom confirmed on Thursday that Russia’s third-biggest mobile phone operator is talking to Egyptian tycoon Naguib Sawiris about a possible purchase of his Italian and Egyptian telecoms assets.
“Everyone talks to everyone, we naturally do not comment on details,” Vimpelcom CEO Alexander Izosimov told reporters at a briefing on second-quarter results, which missed market expectations.
Sources told Reuters last month Vimpelcom was in talks to buy Wind, Italy’s third-biggest operator, and 51 percent of Egypt’s Orascom Telecom from Sawiris.
Talk of the possible acquisition had earlier sparked a sharp sell-off in Vimpelcom shares and bonds as investors worried its debt profile could deteriorate significantly.
Vimpelcom’s second-quarter net profit of $334 million came in more than 50 percent lower than in the year-ago quarter and missed analyst forecasts for $431 million.
Vimpelcom made more than $700 million in the year-earlier quarter, which did not include any contribution from Ukrainian merger partner Kyivstar.
Vimpelcom did not comment on the reasons for the fall, although it absorbed a foreign exchange loss compared to a profit last year.
Sawiris confirmed to Canadian newspaper The Globe and Mail this week he was in talks with Vimpelcom, which is keen to expand into overseas markets.
Vimpelcom merged with Kyivstar as part of a peace deal between the company’s two key shareholders — Russia’s Alfa Group and Norway’s Telenor — which had waged a long-running corporate battle for control of the group.
The two shareholders are in principle behind the move for Wind and Orascom but are keen to find out further pricing details, Russian business daily Vedomosti reported this week.
(Reporting by John Bowker and Anastasia Teterevleva; Editing by Michael Shields)