S&P puts VimpelCom on watch

Standard & Poor's said it placed the BB+ long-term corporate credit rating on Vimpel-Communications (JSC) on CreditWatch with negative implications.

The watch follows the announcement by Vimpel-Communications' parent VimpelCom Ltd. (not rated) that it plans to merge with Weather Investments SpA, the holding company that owns 51.7% of Orascom Telecom Holdings SAE, 100% of Wind Telecomunicazioni SpA, and a number of other telecom operators in several other countries.

"We understand that the perimeter for the potential merger, as well as some of its conditions, are yet to be defined," S&P analyst Alexander Griaznov said in a statement.

"Nevertheless, it is already clear to us that following the merger, the consolidated debt leverage at VimpelCom Ltd. will increase significantly."

The ratio of debt to EBITDA will likely approach 3x on a fully adjusted basis, the agency said.

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