Experience
Acquisition in Telecommunications
VimpelCom
Chadbourne represented Vimpel-Communications in the acquisition of approximately 84.4% of the outstanding shares of Sakhalin Telecom Mobile, which holds cellular licenses for the territory of Sakhalin, and 60% of Sakhalin Telecom Limited, a fixed line alternative operator.
As a result, VimpelCom has secured its entry to the mobile telephony market of Sakhalin, one of the regions within the Asian super-region where the company does not have a super-region license to conduct cellular operations. VimpelCom purchased 84.4% of the outstanding shares of STM for a total cash purchase price of approximately $51.2 million and 60% of Sakhalin Telecom for a total cash purchase price of approximately $5 million (in each case subject to certain adjustments).
The main shareholder of both operators was the British company Cable and Wireless plc (Cable & Wireless), which owned 61.4% of STM (through a subsidiary) and 60% of ST. Under the terms of the transaction, STM and ST were to be purchased simultaneously. With the acquisition of STM, VimpelCom is operating in 76 out of 89 subjects of the Russian Federation.
STM's GSM-1800 and D-AMPS licenses cover a territory with a population of approximately 550,000. According to company estimates, STM's subscriber base at the end of June 2005 was more than 96,000 (including more than 95,500 GSM subscribers), which according to company estimates represented a market share of approximately 45.7% in the Sakhalin region. According to independent estimates, the penetration rate in Sakhalin is approximately 35.5%.
VimpelCom is a leading international provider of telecommunications services, operating under the "Beeline" brand in Russia and Kazakhstan. In addition, VimpelCom is continuing to use the "K-mobile" and "EXCESS" brands in Kazakhstan. The VimpelCom Group's license portfolio covers approximately 94% of Russia's population (136.5 million people), including the City of Moscow, the Moscow Region and the City of St. Petersburg as well as the entire territory of Kazakhstan. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (NYSE).
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