The FINANCIAL — Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP) announced on July 7 that it has exercised its option to acquire an additional 25% less one share of Limnotex Developments Ltd. (“Limnotex”) for US$ 561.8 million.
Limnotex is the parent company of LLP KaR-Tel (“KaR-Tel”), VimpelCom’s operating subsidiary in Kazakhstan. As a result of the exercise, VimpelCom’s share in Limnotex increased from 50% plus one share to 75%.
The increase in VimpelCom’s stake in Limnotex implements VimpelCom’s original plan to increase its economic interest in KaR-Tel following the initial period of ownership. KaR-Tel continues to demonstrate strong financial results with good opportunity for growth. Therefore, as the option price was tied to KaR-Tel's financial results, VimpelCom exercised the option to capture the benefit of future growth.
To ensure a path to complete ownership over KaR-Tel, VimpelCom has agreed on put and call option arrangements with respect to the remaining 25% share in Limnotex which is held by Crowell Investments Limited.
Discussion about this post