Russia's Altimo Denies Reports of Selling Vimplecom Stake

Russia's Altimo Group has rejected local media reports and denied that it would have to sell part of its stake in Russian mobile operator, Vimplecom in order to meet its banking obligations. Several Russian Oligarchs have been forced to sell some of their assets in recent weeks as the stock market value of the assets fell below levels accepted as security for bank loans.

The Altimo Group pledged its 16% of Vimplecom for a US$1.5 billion loan from Deutsche Bank. As the stock market valuation of the shareholding has fallen below the value of the debt, the bank was reported in local media to have called in the loan.

The company controls 44% of Vimplecom, which is Russia's second largest mobile operator - along with Telnor holding 29.9% of the voting stock and 24.3% floated on the stock exchange.

In a statement, the company said "Altimo reconfirms that it continues to fulfill its obligations according to all current loan agreements and has no financial problems relating to these agreements."

Kirill Babaev, Altimo's senior Vice President, said: "We consider Vimpelcom to be one of our key strategic assets and it demonstrates outstanding operational and financial performance. We strongly believe in its solid long-term potential as a strategic investment and have no intention to sell any stock we have in the company's capital".

In related news, last week VimpelCom signed a new unsecured loan agreement for ¢â€š¬600 million (US$762 million). The facility has a 3 year tenor and an amortizing structure, with repayments due in five equal semi-annual installments starting from the date falling 12 months after the signing date. The rate of interest for the facility is the percentage rate per annum which is the aggregate of EURIBOR plus a margin of 2.30%.

VimpelCom says that it intends to use the proceeds from the loan to continue the development and expansion of its networks, including through possible acquisitions or investments in existing operators, and to repay indebtedness.

Altimo pledged all of its Vimpelcom shares to Deutsche Bank in 2007 in connection with bonds issued by its affiliate, Eco Telecom, including 16 percent as security for a $1.5 billion tranche and 28 percent for a $500 million tranche.

The market value of Vimpelcom shares has fallen nearly 50 percent since the shares were pledged.

Based on the current price, the value of the 16 percent stake has fallen below the value of the $1.5 billion tranche that falls due in spring 2009.

It did not say whether it had received a margin call on the $1.5 billion loan. Deutsche was not immediately available for comment.

Posted to the site on 26th October 2008