VimpelCom Shares Plunge as Moscow Court Bans Dividends

Friday, 25 May 2012 12:40 PM

 

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Shares of VimpelCom Ltd. fell the most on record in New York trading Friday after a Moscow court said the world’s sixth-largest wireless operator was banned from paying dividends for its 2011 earnings.

American depositary receipts of Amsterdam-based VimpelCom sank 12 percent to $7.64 at 11:35 a.m. in New York, the biggest decline since the company’s offering in April 2010.

The court banned VimpelCom and its Russian unit from paying dividends for their profits last year, the company said in a statement Friday. The ruling comes after the Federal Anti-monopoly Service claimed Egyptian billionaire Naguib Sawiris’ Weather Investments II SARL sold 11.3 percent of VimpelCom’s voting stock to Telenor ASA, according to the statement.

“It’s not just about the dividend,” Alexander Vengranovich, an analyst at Otkritie Financial Corp. in Moscow said by phone. “The news points to an escalation of conflict between shareholders, mounting uncertainty about the company and that outweighs everything else.”

The dividend yield of VimpelCom was 7.75 percent over the last 12 months, compared with the 1.93 percent average for companies traded on the Bloomberg Russia-US 14 Index.

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