Russia VEB to agree to Vimpelcom, Kyivstar merger
*Altimo, another 5 firms win VEB's loan extensions *PM Putin says no write-offs on loans
(Adds loan extension details, background)
By Darya Korsunskaya
MOSCOW, Oct 8 (Reuters) - Russia's state lender VEB, which hold a blocking stake in mobile operator Vimpelcom (VIP.N) as loan collateral, will agree to its merger with Ukrainian operator Kyivstar, the bank's head said on Thursday.
"We do not have any other options (but to agree), those are good companies," Vladimir Dmitriyev told Reuters.
Russia's Altimo, a major shareholder in Vimpelcom, and Norway's Telenor TEL.NO announced earlier this week their plans to merge Vimpelcom and Kyivstar and create a leading emerging markets' mobile operator. [nL5628437]
Altimo owes $1.5 billion VEB pledging a blocking stake in Vimpelcom as collateral and VEB has agreed to extend the loan for another 12 months on Thursday.
VEB lent out about $10 billion to six Russian borrowers Gazpromneft (SIBN.MM), Evraz HK1q.L, PIK Group (PIKK.MM), AFK Sistema's (AFKS.MM) Sitronics (SITRIq.L), Altimo and aluminium giant RUSAL.
VEB's supervisory board, chaired by Prime Minister Vladimir Putin, approved loan extension for all six firms but the terms on some loans have been changed, Dmitriyev told a news conference said without elaborating.
The companies borrowed from VEB in order to refinance outstanding debt when the global financial crisis effectively shut international capital markets for Russian firms.
"We think some borrowers can service and pay their loans back (without VEB's loans extension)... Anyway there will be no write-offs on those loans," Russia's Prime Minister Vladimir Putin told VEB's supervisory board.
VEB proposed to keep interest rates on loans issued to Altimo, aluminium giant RUSAL and steelmaker EVRAZ HK1q.L unchanged at LIBOR plus 5.0 percent, a source close to the VEB's board told Reuters.
The source said Rusal may still win the right to deter interest payments equal to 200 basic points to pay it in the end of loan's life.
VEB also may raise the interest rate on loans for technology firm Sitronics (SITRIq.L) by 130 basic points to LIBOR plus 8.3 percent and for real estate developer PIK (PIKK.RTS) by 100 basic points to LIBOR plus 9.0 percent, the source said.
RUSAL owes $4.5 billion to VEB, Evraz has a $1.8 billion credit line with the bank, PIK Group borrowed $300 million and oil company Gazpromneft borrowed $375 million.
(Writing by Dmitry Sergeyev; Editing by Hans Peters)
((dmitry.sergeev@reuters.com; +7 495 775 1242; Reuters Messaging: dmitry.sergeev.reuters.com@reuters.net)) Keywords: VEB VIMPELCOM/
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