Moody's: VimpelCom's sale of stake is credit positive

Moody's Investors Service said that VimpelCom Ltd.'s completion of the sale of a 51% stake in its indirect subsidiary Orascom Telecom Algerie SpA (Djezzy) to the Algerian National Investment Fund, Fonds National d'Investissement, is credit positive for VimpelCom because it generates a cash inflow of $3.8 billion, which VimpelCom will use to reduce debt. In addition, Moody's expects that VimpelCom will start receiving regular dividends from Djezzy, which so far have not been paid because of restrictions set by the Algerian authorities that are now settled.

VimpelCom's ratings, including its Ba3 corporate family rating, remain on review for downgrade. They were placed on review in December along with the ratings of 44 other non-financial corporates operating in Russia. The agency said the review will focus on the assessment of the effect of the deteriorated operating environment in Russia and dramatic roble depreciation on VimpelCom's financial profile and liquidity.

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