Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

VimpelCom CEO Extends Contract

VimpelCom CEO Alexander Izosimov agreed Thursday to extend his contract by two years, ending months of speculation about whether he would resign at the end of this month.

The company's board offered Izosimov the extension after a majority vote, and Izosimov accepted, the firm said.

Fridtjof Rusten, Telenor's representative on VimpelCom's board, said the Norwegian company had accepted the decision even though it failed to get the approval of all its representatives.

"We will work constructively with Izosimov even though we had differences in the past," Rusten said in Oslo, Reuters reported.

His remarks squelched talk that Telenor might go to court over the reappointment. Telenor could have mounted a challenge because the board vote was passed by a simple majority, rather than the 80 percent required by the company's charter. The vote is valid under Russian law, but VimpelCom's charter requires that major decisions, such as the appointment of CEO, get the approval of eight of the nine board members.

"Today's vote clearly shows that there is a problem in the relationship between the board of directors and VimpelCom's strategic investors that must be solved," Izosimov said in a statement.

This summer, Izosimov threatened to leave when his contract ended Oct. 1 if relations between Telenor and Alfa's telecoms arm, Altimo, did not improve.

Telenor owns 29.9 percent of VimpelCom, while Altimo holds 32.9 percent.

Telenor and Altimo fell out after VimpelCom's November purchase of Ukrainian RadioSystems for $231.3 million. The Norwegian operator filed a series of lawsuits against VimpelCom, contesting the legality of the purchase. Both Telenor and Alfa also hold stakes in Ukraine's No. 1 operator, Kyivstar.

Altimo said it was "ready to support VimpelCom's executive and its management teams in the future."

VimpelCom's shares should soar on the reappointment because Izosimov has successfully led VimpelCom both when it was growing quickly and now that it has reached maturity, said Anastasia Obukhova, a telecoms analyst with Deutsche UFG.