The deal envisions Alfa's telecoms vehicle Altimo and Norway's Telenor each receiving a 40 percent stake of the merged company, with the additional shares going to various VimpelCom minority shareholders, the sources said. Altimo head Alexei Reznikovich proposed this deal to Telenor executive vice president Jan Edvard Thygesen in late March.
How the merger would take place has not been decided.
Under one scenario, Altimo and Telenor would deposit their Kyivstar and VimpelCom shares in a joint venture that they would register in the United States. VimpelCom's minority shareholders could either convert their stock into shares of the newly formed joint venture, making the company the full owners of VimpelCom and Kyivstar, or hold on to their shares, in which case the joint venture would own 75 percent of VimpelCom and 100 percent of Kyivstar. The proposed joint venture would not be under the control of either Telenor nor Altimo.
VimpelCom and Kyivstar shareholders have considered a merger before, most recently in 2006.
Even now, the deal may not get signed, an Alfa Group executive said. Telenor has laid out a long list of demands and will agree to a deal only after they are fulfilled, the executive said.
A source close to Telenor confirmed that the deal still has many points that have not been agreed upon.
Telenor and Alfa have been feuding since 2005.
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