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. Last Updated: 07/27/2016

VimpelCom Seeks to Borrow $4.5Bln

VedomostiVimpelCom, which operates the Beeline brand, may be seeking funds to acquire fixed-line operator Golden Telecom.
Mobile phone firm VimpelCom aims to close syndication of a $4.5 billion loan in early December and may refinance the debt in 2008 via a eurobond issue, a banking source said Tuesday.

VimpelCom, in which private equity group Alfa and Norway's Telenor own strategic stakes, is the target of intensifying media speculation that it is raising the cash to acquire fixed-line operator Golden Telecom.

"VimpelCom wants to get the money up front. They plan to cover the six-month bridge financing with an issue of eurobonds," the source said, adding that the deal structure should be finalized this week.

People familiar with the matter said VimpelCom was eyeing the deal as a so-called convergence play to bundle its services with those of Golden Telecom, which has launched urban Wi-Fi networks in Russia.

A second source suggested that the deal might involve a share swap. "VimpelCom will buy Golden Telecom, and the shareholders of Golden will get a stake in VimpelCom," the source said.

Such a transaction could create value in the country's saturated mobile phone market, where penetration has reached 114 percent and subscriber growth is expected to fade, analysts said.

"Strategically, this is a good idea for VimpelCom," said Igor Semyonov, a telecoms analyst at ING Bank.

"If this happens, it won't be surprising, as [VimpelCom CEO Alexander] Izosimov's comments some time ago clearly suggested it was time to think about new drivers of growth."

Izosimov said in July that VimpelCom had been in touch with Golden Telecom to explore entering new business lines.

VimpelCom's main rival, market leader MTS, plans to bundle services with fixed-line affiliate Comstar.