VimpelCom in Talks to Buy Minority Stake in Phone Retailer

Russian mobile operator, VimpelCom has confirmed that the company is in talks to take a large minority stake in Yevroset (Euroset) - just weeks after it was sold by its founders to Russian billionaire, Alexander Mamut.

"This is a normal preparatory move. The deal would be of interest to us," Izosimov told the Moscow Times. The company has filed a request to the Federal Anti-Monopoly Service for clearance to buy the stake - which is reported to be  "more than 25 percent."

Alexander Mamut will pay US$400 million cash and assume about US$850 million in debt. The debt mountain has been weighing down the company and rumours have swirled this year that the firm was in financial trouble, despite turnover of $3.6 billion last year.

Altimo, an Alfa Group subsidiary that owns 44 percent of VimpelCom, was also mentioned as a party in the deal.

Eldar Murtazin, chief analyst at Mobile Research Group told the newspaper that the company may have always intended to take a stake in Euroset, but chose to wait until it was sold to an Oligarch so that it could structure the deal in a way which does not impact on its financial results.

Euroset operates around 5,000 outlets in Russia, Belarus, Ukraine, Kazakhstan and Kyrgyzstan, Moldova and recently set up outlets in India.

On the web: Moscow Times

Posted to the site on 1st October 2008