Megafon To Raise $541.5 Million To Develop Russian Network

MOSCOW -(Dow Jones)- Russia's third-largest wireless operator, OAO Megafon (MGF.YY), said Thursday that it will borrow $541.5 million to develop its network in Russia.

The company said in a press release that up to $220 million will come via a 3-year unsecured revolving credit facility from a syndicate of 8 banks headed by Citibank NA (C) and ING Bank N.V. (INK.YY). A further $321.5 million will come in the form of a 6-year loan from a consortium consisting mainly of the same banks, the company said.

Megafon said the second loan will be used to purchase equipment from the Nokia Corp. (NOK) and will be guaranteed by the Finnish export credit agency Finnvera.

Megafon also said it has agreed with Citibank and ING that existing loans totaling $183 million will be secured by Finnerva and the Swedish export credit agency EKN. The loans were previously guaranteed by $300-million worth of equipment.

Company Web site: http://www.megafon.ru

-By Andrew Langley, Dow Jones Newswires; +7 095 974 80 55; andrew.langley@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 9th June 2005