Telenor ASA — M&A Activity 2015

Oct 5, 2015

Telenor Group announces intention to divest shares in VimpelCom Ltd.

Telenor Group announces intention to divest shares in VimpelCom Ltd.

Telenor Group today announced its intention to divest all

its shares in VimpelCom Ltd., where the company has an

economic stake of 33 per cent. Telenor Group will now fully

focus on creating value in core operations.

"The VimpelCom asset, where Telenor holds a minority

position without the possibility to fully control the

company, has been challenging. Based on a strategic review

by the Board and the CEO, and after due considerations,

Telenor Group has decided to divest its shares in VimpelCom

Ltd. The disposal of our shares is in the best interest of

our shareholders, and in accordance with Telenor Group's

long-term strategic focus," said Mr. Svein Aaser, Chairman

of the Board of Directors of Telenor Group.

VimpelCom Ltd. has gradually contributed less to the value

of Telenor Group, and the value of Telenor's core operations

have increased rapidly. Today, the market value of the

VimpelCom Ltd. shares represents approximately eight per

cent of Telenor's market capitalization.

"We have maintained growth through solid performance from

our controlled operations and will continue to focus on

value creation in our core operations. Our ambition is to

drive profitable growth in the telecom business, where

Telenor will continue to monetize on the exponential data

usage taking place across our footprint," said Mr. Sigve

Brekke, President and CEO of Telenor Group.

Telenor Group has invested NOK 15 billion in VimpelCom. The

company has received NOK 20 billion in dividends and the

current market value of the ownership stake is approximately

NOK 20 billion.

Telenor Group will explore all options to divest its shares

in VimpelCom Ltd., and will seek to find the best solution

for Telenor and its shareholders. A timeframe for the

divestment has not been set, but a process like this will

normally take some time. As a result of today's announcement

Telenor will not convert its VimpelCom Ltd. preferred shares

into common shares.

The Vimpelcom Ltd stock declined in the third quarter and

ended at USD 4.11 per share vs book value of USD 5.64 per

share. As a consequence of the intention to divest,

impairment evaluations going forward will be based on the

market price of the Vimpelcom Ltd share. This will result in

a non-cash impairment of approximately NOK 7.5 billion in

the third quarter.