Norwegian telecommunications company Telenor Group plans to sell its entire 33 percent stake in Amsterdam-based VimpelCom to focus on creating value in its core operations, it said Monday.
The market value of Telenor's stake in network operator VimpelCom is about 20 billion Norwegian krone ($2.39 billion). Telenor has invested 15 million krone in Vimpelcom, receiving dividends to the tune of 20 billion krone, Telenor said in a statement.
As a consequence of the divestment, impairment evaluations going forward will be based on the market price of the Vimpelcom stake. This will result in a non-cash impairment of approximately NOK 7.5 billion in the third quarter, Telenor said.
"The VimpelCom asset, where Telenor holds a minority position without the possibility to fully control the company, has been challenging," Svein Aaser, chairman of the Telenor Group board, said in a statement. "The disposal of our shares is in the best interest of our shareholders, and in accordance with Telenor Group's long-term strategic focus," he said.
Telenor Group said it would explore all options to divest its shares in VimpelCom, with no timeframe for offloading the asset yet set. Such a process would normally take some time, the company added.
As a result of today's announcement Telenor will not convert its VimpelCom preferred shares into common shares.