Norwegian telecoms group Telenor and Alfa Group are close to an asset swap deal in which Alfa will receive a 5 percent stake in Telenor, a source close to the Norwegian side said Monday.

Under the preliminary deal structure, Alfa will hand over its entire stake of 43.5 percent in Ukrainian carrier Kyivstar to Telenor, the source said.

In exchange, Telenor will hand over about 12 percent of voting shares in VimpelCom, in which it currently has 29.9 percent, to Alfa.

The deal also envisions a transfer of a near 5 percent Telenor stake owned by the Norwegian government to Alfa. Norway currently has around 54 percent of Telenor.

The source said the deal would have no cash component and that a final agreement could be reached in the next few weeks.

President Dmitry Medvedev met with Alfa's chairman and co-owner, Mikhail Fridman, on Monday, and the Kremlin web site said the two men discussed the government's support for Alfa's international expansion plans.

"We have an aggressive, in the good sense of the word, policy to expand on the market of developing countries,'' Fridman told Medvedev, according to the Kremlin web site. "We will try to take part mainly in Asian markets, countries like Iran and Afghanistan."

Kirill Babayev, a senior vice president of Altimo, which runs Alfa Group's telecom assets, confirmed the talks.

"We are indeed holding talks with Telenor about an asset swap but cannot comment on the commercial details of the negotiations," he said.

Telenor and Norway's Industry Ministry, which oversees the government's stake in Telenor, both declined to comment.

Reuters, Bloomberg, MT