Tuesday, open joint stock company Vimpel-Communications (VIP) said that the company's board of directors has unanimously recommended that its shareholders and holders of American depositary shares exchange their company shares and ADSs for VimpelCom Ltd. depositary shares in the exchange offer launched today by VimpelCom Ltd.
The company said that immediately after the completion of the exchange offer, VimpelCom Ltd. intends to acquire all of the outstanding shares of closed joint stock company "Kyivstar G.S.M."
VimpelCom said that its exchange offer comprises a U.S. offer and a Russian offer. The U.S. offer is open to all holders of the company's shares resident in the United States and all holders of the company's ADSs, wherever located while the Russian offer is open to all holders of the company's shares, wherever located. However, only shareholders who are "qualified investors" under Russian law may receive VimpelCom Ltd. depositary shares or DRs in exchange for their shares tendered into the Russian offer.
The Moscow, Russia-based telecommunications provider said that in the exchange offer it is offering all holders of its ADSs one VimpelCom Ltd. common DR, which represents one VimpelCom Ltd. common share in exchange for each ADS. It is offering all holders of its common shares 20 VimpelCom Ltd. common DRs, which represent in the aggregate 20 VimpelCom Ltd. common shares in exchange for each common share. Also, the company is offering all holders of the company's preferred shares, 20 VimpelCom Ltd. preferred DRs representing in the aggregate 20 VimpelCom Ltd. preferred shares in exchange for each preferred share.
Alternatively, holders of shares and ADSs may elect to receive a cash payment of 0.01 Russian roubles for each common share or preferred share and 0.0005 Russian roubles for each ADS. The company said that this nominal cash consideration is being offered to comply with Russian regulations and is not intended to constitute fair market value and the board has recommended that the shareholders and ADS holders not elect to tender their shares and ADSs in exchange for this alternative.
Boris Nemsic, chief executive officer said, "The launch of the tender offer is a very important step toward the goal of positioning the VimpelCom group as a global player in the telecommunications industry. We continue to support the transaction which we believe will create value for the Company's stakeholders and we welcome the participation of all our shareholders in the new company."
In connection with the board's recommendation, the company said that it will file today with the United States Securities and Exchange Commission a solicitation/recommendation statement on Schedule 14D-9, which contains more information on the offer and the reasons for the recommendation.
The U.S. offer will close at 5:00 pm New York City time on April 15, 2010, and the Russian offer will close at 11:59 pm Moscow time on April 20, 2010, unless extended.
Successful completion of the exchange offer is contingent on more than 95% of the company's outstanding shares including those represented by ADSs being tendered in the exchange offer, in addition to other conditions described in VimpelCom Ltd.'s registration statement.
In connection with the Russian offer, VimpelCom Ltd. has filed a voluntary tender offer document with the Russian Federal Service for the Financial Markets. The company will deliver the Russian voluntary tender offer document, together with the recommendations of its board of directors and related Russian offer acceptance materials, to holders of the company's shares.
The company said that it has engaged UBS Investment Bank to act as its financial advisor and Akin Gump Strauss Hauer & Feld LLP to act as its legal advisor.
VIP is currently trading at $17.22, up $0.47 or 2.87%, on a volume of 3.08 million shares on the New York Stock Exchange.
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