PRESS: Russia's MegaFon to Borrow Up to $640 Mln from Units

MOSCOW, Mar 19 (Prime-Tass) -- Shareholders of Russia's third largest mobile operator MegaFon have approved the company's taking loans worth up to US$640 million from three of the its subsidiaries, Vedomosti business daily reported Monday.

MegaFon plans to take a loan of up to $200 million from Moscow-based Sonic Duo, up to $140 million from MSS-Povolzhie, and up to $300 million from Mobicom-Kavkaz. The loans will be taken out at annual interest rates of no more than 11%. All three companies are fully owned by MegaFon, the daily reported.

MegaFon's spokeswoman said that these were the maximum loan amounts, and that MegaFon might borrow less, the daily reported. MegaFon plans to use the funds to finance network expansion, equipment purchases and to finance corporate operations, she added.

MegaFon operates in Russia through eight subsidiaries and one branch. The company had 30.5 million users in Russia as of February 28, according to Advanced Communications & Media (AC&M).

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Posted to the site on 19th March 2007