Vedomosti

VimpelCom's financial committee has approved the purchase of a 49% stake in the Corbina Telecom ISP from Alexander Mamut. Mamut stands to make around $500 million by selling his shares.

Four sources close to VimpelCom and Corbina shareholders have told us that the financial committee of VimpelCom met on May 28 to consider a plan to purchase 49% of Corbina Telecom from Inure (owned by Mamut). Two of the sources added that the deal was approved. Mamut and a VimpelCom spokesman declined to comment.

Corbina Telecom is a group of telecommunications operators. It includes the Investelektrosvyaz and Kortek companies, operating in 24 regions and providing broadband Internet access (third-largest broadband ISP in Moscow according to user numbers, and fourth-largest in St. Petersburg); it also provides mobile phone and land-line services. Its Internet access network covers over 3 million homes in Moscow and six other cities. Stakeholders: Golden Telecom (51%) and Inure 949%). Revenues from communications services for 2007: over $140 million.

Mamut, together with the Renova Capital direct investment fund (owned by Viktor Vekselberg), acquired 100% of Corbina in late 2005, paying $146 million to IDT (USA). Corbina became the property of Inure, in which Mamut owned 71.1% and Renova Capital owned 28.9%. Thus, Mamut's investment in Corbina was estimated at $103.8 million.

A year later, the partners swapped 51% of Corbina for 8% of Global Telecom plus $10 million; in February 28 they took advantage of VimpelCom's offer and sold the Global Telecom shares for $334.9 million. Based on the size of his stake, Mamut may have received $245.2 million of this.

Corbina's co-owners planned to offer part of its shares publicly, and brought in some consultants (Alfa Bank and Lehman Brothers) who estimated that the whole company will be worth $800 million to $1.1 billion by the end of 2008. But VimpelCom, which had bought Golden Telecom by then, decided to consolidate 100% of Corbina.

In late April, in the lead-up to consolidation, Mamut bought out his partner's stake in Inure and ended up owning 49% of Corbina. This deal was based on a valuation that set Corbina's total worth at $500-700 million; thus, Inure may have spent up to $99 million on a 28.9% stake. So the total cost of acquiring Corbina shares may have been $203 million.

A source close to one of the consultant banks said on May 28 that Mamut intends to sell his stake based on a valuation of $800,000 to $1.1 billion for the whole company. A second source added that the negotiators have agreed on $950 million, counting the company's debts. If so, Mamut could get $465.5 million - and gain a total of up to $711 million by selling his stakes in Corbina.

Thus, the difference between spending and revenue is $508 million. A source acquainted with Mamut says he has invested "tens of millions of dollars" in developing Corbina.

Unicredit Aton valued Corbina at $850 million a few months ago. "But given the growth of broadband services, our estimate seems conservative now," says Unicredit Aton analyst Anna Kurbatova. "When investors bought Corbina from IDT, it was only starting to establish its broadband access network, and few had any faith in its prospects." By the end of March 2008, Corbina had 392,700 broadband users - and market penetration for broadband services in Moscow had reached 46.6%.