Golden Telecom in Talks With Corbina

Golden Telecom, the country's largest independent fixed-line operator, said it is in talks to acquire the 49 percent it doesn't already own of broadband Internet provider Corbina Telecom.

In a U.S. Securities and Exchange Commission filing late Wednesday, Golden Telecom said it had "engaged in preliminary discussions with Inure Enterprises Limited" to acquire a 49 percent interest in Cortec, the parent company of Corbina.

The deal would remove the need for Golden Telecom to proceed with its current contractual commitment for an initial public offering of at least 10 percent of Corbina by the end of 2008.

Golden Telecom said it had hired ABH Financial Limited, which controls Alfa Capital Holdings, the parent company of Alfa's telecom arm Altimo, as a consultant on the deal.

Golden Telecom paid about $162 million in June 2007 for a 51 percent stake in Corbina. The remaining 49 percent is controlled by Inure Enterprises Limited, which is jointly owned by financier Alexander Mamut and oil and metals billionaire Viktor Vekselberg.

Jean-Pierre Vandromme, chief executive of Golden Telecom, at the time said Vekselberg and Mamut could sell up to 25 percent of Corbina in 2008 in an IPO.

Yulia Shakhnovskaya, a spokeswoman for Alexander Mamut, the majority shareholder in Inure, said Thursday that it was too early to comment on the deal as talks were ongoing.

Corbina operates in 25 regions across the country, including Moscow, providing broadband Internet, voice and data services. Under the deal, Golden Telecom plans to spend more than $1 billion over four years to roll out networks in the country's 65 largest cities.

Anastasia Borzova, head of Golden Telecom's investor-relations department, declined to comment Thursday, saying it was company policy not to comment on ongoing negotiations.

Konstantin Chernyshev, a telecom analyst with UralSib, said the deal was "widely expected," adding that selling the remaining 49 percent through an IPO made no sense, as VimpelCom was already acquiring Golden Telecom.

"Current market conditions are not congenial to an IPO," Chernyshev said. "Golden Telecom's offer is a big relief for Corbina's shareholders."

VimpelCom's board of directors on Monday gave its unanimous backing to a loan of $4.15 billion for its subsidiary Lillian Acquisition to buy Golden Telecom.

VimpelCom chief executive Alexander Izosimov said last month that his company would try to find a solution with Corbina shareholders that would avoid the costs of holding an IPO.

"By acquiring Golden Telecom, we take responsibility for Corbina," Izosimov said, Interfax reported.

Golden Telecom will give VimpelCom more than $1 billion in additional annual revenue, about 400,000 new broadband Internet customers and a foothold in fixed-line services.

Altimo, the Alfa telecom arm, holds 26.6 percent in Golden Telecom and 44 percent in VimpelCom.

Altimo agreed to sell its Golden Telecom stake to VimpelCom, Golden Telecom said Wednesday in a separate filing.