MegaFon IPO Backed By Fridman

Billionaire Mikhail Fridman said an initial public offering of MegaFon, the country's third-largest mobile phone company, would give the provider greater opportunities to expand.

"We look at it as a positive development," Fridman, a MegaFon shareholder, said in an interview at a Kremlin reception Thursday for the Russia Day holiday. "MegaFon will get more opportunities as a public company."

MegaFon, which counts more than 37 million subscribers in Russia and Tajikistan, may go public as soon as 2009, chief executive Sergei Soldatenkov told reporters in April. The company is seeking to expand internationally and has said it may invest 3 billion euros ($4.6 billion) in a network in Iran should it win a license in the country.

Fridman's Alfa Group holds 25.1 percent in MegaFon, while TeliaSonera, Sweden's largest phone company, has 35.6 percent in MegaFon and also holds 26.1 percent in MegaFon shareholder Telecominvest. Billionaire Alisher Usmanov agreed last month to increase his stake to 73.9 percent in Telecominvest, which in turn controls 31.3 percent in MegaFon.

Alfa does not plan to sell its MegaFon shares in the IPO, Fridman said. He said he welcomed Usmanov as a MegaFon shareholder, declining to say whether there had been any talks among shareholders regarding the IPO.

Usmanov is buying the Telecominvest stake from Danish lawyer Jeffrey Galmond along with an additional 8 percent holding in MegaFon previously held by IPOC International Growth Fund, for an unspecified sum.

Usmanov said at the same reception Thursday that it was too early for him to comment on the IPO before the purchase of Telecominvest shares is complete. "The question is when," he said.

Usmanov is the country's 19th-richest person, with an estimated wealth of $9.5 billion, according to Forbes. The Uzbek-born billionaire is the majority owner of Metalloinvest, the world's fourth-largest iron ore producer, among other businesses. He owns the Kommersant Publishing House, which runs Kommersant, and controls the Muz-TV music channel.