(Adds bailiffs comment, quotes from latest statement)
MOSCOW, June 9 (Reuters) - An appeal by Norwegian telecoms company Telenor on a $1.7 billion court fine will not stop Russian bailiffs from selling its Russian mobile assets to cover the fine, the bailiffs said on Tuesday.
The bailiff's service issued a statement late on Tuesday reversing an earlier comment by its deputy head, who had said the shares would not be sold before the appeal.
"The Western Siberian Federal Arbitration Court's hearing of an appeal of the decision in no way halts its enforcement and does not hinder the actions under way to hand over the frozen shares for sale," the bailiffs service said in the later statement.
The First Deputy Director of the Federal Bailiff Service, Sergei Sazanov, had told a news conference earlier the bailiffs would not take any steps to enforce the sale of the stake in Vimpelcom until after Telenor's appeal hearing on Wednesday.
Norwegian Prime Minister Jens Stoltenberg demanded in a meeting last month with Russian Prime Minister Vladimir Putin that Telenor's holdings be left intact until the case had run its course in Russia's courts.
Analysts at VTB Capital said in a research note earlier in the day that they expected the bailiffs to wait for the court's final decision, but the service said in its statement that it had no grounds to do this.
The decision to recover $1.7 billion in damages from Telenor on Vimpelcom's behalf "has been put into force and under the current circumstances the delay of its enforcement is legally inadmissable," the bailiffs service statement said.
On Wednesday, the court in Tyumen is due to resume hearing the appeal, which was brought by Telenor after another Siberian court ruled that it must pay damages to Vimpelcom for allegedly holding back its business in Ukraine.
As the Norwegian company has refused to pay the fine, the Russian bailiff service has prepared for the sale of Telenor's Vimpelcom stake. Telenor's motion for a stay of enforcement was denied by a Moscow court last week.
On Monday, the bailiff service said the stake would be handed over shortly to be auctioned off on the stock market, ratcheting up pressure on the Norwegian company.
Sazanov said the shares were unlikely to be put up for sale in one lot, although the final decision had yet to be taken.
The price would be set based on a three-day average stock market price for Vimpelcom shares, he said.
Telenor sees the case as part of its protracted dispute with Russian billionaire Mikhail Fridman's Alfa Group.
The latter has denied any link to Farimex Products, a tiny Vimpelcom shareholder behind the suit.
"We are reiterating our position that the Russian party to the dispute with Telenor will remain one step from selling the stake in order to push Telenor towards negotiating asset swap terms with Alfa that are more favourable for the latter," VTB Capital said.
Analysts view the case as a manoeuvre linked to high-stakes talks between the two companies and expect them eventually to split their mobile holdings in Russia and Ukraine, where they also have joint ownership of operator Kyivstar, although Alfa has proposed they pool their mobile holdings in a single company. (Reporting by Maria Kiselyova; Editing by Ted Kerr)