MOSCOW, March 19 (Reuters) - Russia’s Vimpelcom is considering a refinancing plan to improve the capital structure of its Italian subsidiary Wind, the mobile phone operator said on Wednesday.
The plan may include a cash injection of 500 million euros ($695.7 million) by Vimpelcom, part-owned by Mikhail Fridman’s Altimo and Norway’s Telenor, the company said.
“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,” the company said in a statement.
Vimpelcom bought Wind in 2011 in a deal which also saw it take a 51 percent stake in Egypt-based Orascom Telecom for $6 billion. Vimpelcom has a total net debt of $22.6 billion according to its latest earnings report.
Vimpelcom has a total net debt of $22.6 billion according to its latest earnings report, of which Wind’s debt accounts for $14.5 billion.
There has been media speculation that Vimpelcom will seek to refinance or merge Wind because Italy’s mobile companies have faced fierce price competition. Telecom Italia is the leading player in Italy’s mobile phone market, followed by Vodafone Italia, Vimpelcom’s Wind and Hutchison Whampoa’s 3 Italia.
Vimpelcom said in its statement on Wednesday that Wind is 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 in debt incurrence to allow a refinancing of pay-in-kind notes guaranteed by Wind’s immediate parent.
$1 = 0.7188 euros Reporting by Megan Davies, editing by Jason Bush and Louise Heavens