(Corrects text and headline to clarify that Davies was no
longer CFO of Verizon Wireless since June and was instead
referred to as Vodafone's financial representative at Verizon
* Moving listing after nearly two decades on NYSE
* Appoints Verizon Wireless' Andrew Davies as CFO
MOSCOW, Aug 7 Telecoms group Vimpelcom,
with assets in Russia, Italy and emerging markets, poached the
former CFO of the biggest U.S. mobile provider Verizon Wireless,
and defected to Nasdaq after nearly two decades trading on NYSE
Luring Andrew Davies is a coup for Vimpelcom. He worked at
Vodafone's Turkish, Japanese and UK businesses before taking the
position of chief financial officer at the U.S. giant - a
venture between Verizon Communications and Vodafone
- in 2010.
Davies left that role in June to become Vodafone's financial
representative at Verizon Wireless.
His appointment by Vimpelcom was seen as an attempt to
reassure investors that the Amsterdam-based group will cut its
debt burden, ease out of some emerging markets and focus on
larger markets instead.
"None of the key tasks Vimpelcom has faced - to ease its
debt burden or to refinance Wind's (its Italian operations)
debts in order to lower its interest expenses - have been
really fulfilled over the past one-and-a-half to two years,"
said Alexander Vengranovich, analyst at Otkritie brokerage.
Vengranovich described Davies as "a very experienced and a
Vimpelcom's net debt stands at $22.6 billion, built up while
pursuing expansion in 2010 outside of its core Russian market
through a more than $6 billion deal for Egypt's Orascom Telecom
and Italy's Wind.
Vimpelcom vies for customers and investors seeking exposure
to the Russian telecoms market with London-listed rival Megafon
and New York-listed MTS and Megafon.
Some investors have favoured Megafon and MTS due to
Vimpelcom's lagging performance in Russia and a long shareholder
dispute between its shareholders Altimo, the telecoms arm of
Russian billionaire Mikhail Fridman's Alfa-Group, and Norwegian
telecoms group Telenor, which was resolved last year.
One investor, who prefers MTS and Megafon, said he needed
more assurances to demonstrate that shareholder disputes had
settled down and that a turnaround in Italy and Russia had taken
"It would take a couple of quarters of sustained improvement
to change my mind," said the investor, who declined to be named.
Vimpelcom has focused on improving its market share in
Russia by cutting costs and boosting network quality, while a
report by Russia's Vedomosti newspaper suggested management
changes in Russia were also in store, something Vimpelcom
Vedomosti, citing sources, said Altimo wanted to replace
Vimpelcom's Russia CEO Anton Kudryashov. Vimpelcom's CEO Jo
Lunder rejected this.
"We are pleased with the development in Russia... and I
consider Anton a very important member of my core management
team and I have no plans or intentions to ask Anton to leave the
company," Lunder told Reuters by telephone.
Vimpelcom, which listed on the NYSE in 1996, also
announced on Wednesday it was moving to Nasdaq in order
to be included into several Nasdaq indexes and to save costs.
"There are many TMT (technology, media and telecoms)
companies present on Nasdaq ... and we think it is a natural
step for Vimpelcom to be included into that very strong group of
companies," Lunder said.
"This is something we have been analysing and looked into
for a while and we decided that now is the time," Lunder said.
The NYSE and Nasdaq compete fiercely for listings, although
Russian companies which seek overseas trading tend to apply to
the London Stock Exchange, which is closer.
Vimpelcom will join other Russian technology-focused
companies on Nasdaq such as search engine Yandex and
expects to begin trading on Sept. 10.
The move will, however, be a loss for the NYSE, which boasts
a handful of Russian names such as MTS, steel and coal miner
Mechel and U.S.-based IT services provider Epam Systems
Vimpelcom also said its second quarter net income rose 17
percent year-on-year to $573 million and beating a Reuters poll
forecast of $497 million.
Revenue was flat at $5.7 billion, in line with expectations,
while earnings before interest, taxation, depreciation and
amortisation fell 2 percent to $2.4 billion with a 42.4 percent
margin, Vimpelcom said in a statement.
(Reporting by Maria Kiselyova; additional reporting and writing
by Megan Davies, editing by Elizabeth Piper and Thomas Atkins)