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. Last Updated: 07/27/2016

Telenor Still Wants Divorce After Alfa's Offer of Merger

A divorce of assets is still Telenor's "most desired solution" to its long-running dispute with Alfa Group, the Nordic mobile provider said Wednesday.

In response to reports that Alfa had proposed a merger of the two companies' tangled VimpelCom and Kyivstar assets, Telenor spokesman Dag Melgaard acknowledged that the company was in "regular contact" with Alfa, saying it was "pretty occupied" at the moment fighting its Feb. 20 Omsk court injunction.

Telenor must pay a $1.7 billion fine by Friday or risk the court selling the telecom's arrested 29.9 percent stake in VimpelCom. Telenor has appealed the case to a Moscow court and has said it has no intention of paying the fee.

Alfa has proposed a merger between VimpelCom and Ukrainian telecom Kyivstar, in which Alfa and Telenor also both hold stakes.

Vedomosti reported that Alfa had suggested two options for a possible merger: the two companies could unite their assets under VimpelCom, transferring their Kyivstar assets in exchange for an additional share issue; or they could create a new company that would contain the merged assets. Alfa and Telenor would each be given 40 percent representation on the joint company's board of directors while independent directors would maintain the right to elect new management.

Neither Telenor nor Altimo would comment on their ongoing negotiations. A source on Alfa's side of talks, however, said the marriage looked to be the best solution for a years-long conflict that has been bad for both business and finances.

"Definitely, it would be better to negotiate, and we've always said that we would like to negotiate with Telenor," he said.