(Recasts with Italian consolidation possibility, adds Italian
MOSCOW/MILAN, March 19 Russian telecoms operator
Vimpelcom is considering a refinancing plan for its
Italian subsidiary Wind which could lead to a merger for the
unit that has debt of $14.5 billion.
There has been media speculation that Vimpelcom will seek to
refinance or merge Wind with a rival because Italy's mobile
companies have faced fierce price competition.
Telecom Italia is the leading player in Italy's
mobile phone market by subscribers, followed by Vodafone Italia
, Vimpelcom's Wind and Hutchison Whampoa's 3
"In theory, Wind should merge with the Hutchison unit and
this is simply a way to avoid being a distressed seller," said
an Italian analyst who did not want to be named. "Now we need to
understand if this move can speed up or slow down the process
but it all certainly points in that direction."
The plan to refinance Wind may include a cash injection of
500 million euros ($695.7 million) by Vimpelcom, the company
said in a statement on Wednesday.
"The aim of the refinancing plan is to provide (Vimpelcom)
with significant interest cost savings, stronger cash flow
generation, a deleveraging trajectory and an extended maturity
profile," Vimpelcom said.
The company said Wind was seeking lenders' consent to amend
its lending agreement to allow the financing plan to be
implemented. The amendments would include up to an additional
800 million euros of transaction costs, fees and expenses.
Vimpelcom said it could not comment on any merger
speculation regarding Wind.
The Financial Times reported in December that Wind had been
in discussions with Hong Kong-based Hutchison Whampoa, citing
sources familiar with the situation.
Hutchison Whampoa last year tried to merge with Telecom
Italia, which had rejected approaches made by Wind's former
owner Naguib Sawiris, the Egyptian business tycoon.
Vimpelcom, part-owned by Mikhail Fridman's Altimo and
Norway's Telenor, has been on a drive to cut its $22.6
billion debt and in January slashed its dividend to free up cash
to bring down its debt ratio.
The third largest mobile operator in Russia, Vimpelcom
bought Wind in 2011 in a deal which also saw it take a 51
percent stake in Egypt-based Orascom Telecom for $6
($1 = 0.7188 euros)
(Reporting by Megan Davies and Isla Binnie in Milan; Editing by
Jason Bush and Pravin Char)