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Bond issue
When a Russian telecoms company lists in New York without ever having gone to the local stock exchange, you know it is determined to shed the weight of the country's past and become a high-tech, post-Soviet, globalisation-age phenomenon. When it returns for more equity and debt, while Russia's largest companies are still holding back, you know it is succeeding.
The company is Vimpelcom, the cellular phone operator. On 25 July it raised $68 million from a convertible bond offering in New York, and another $75 million from a simultaneous issue of Level 3 ADRs - the first time since the 1998 financial crash that a Russian company has raised debt finance on the international markets. The bond matures in July 2005 for a final redemption price of 135.41%, giving an 11% yield to maturity. Vimpelcom first issued Level 3 ADRs in November 1996, and remains the only Russian company to have done so.
It is not only Vimpelcom's financial structure that makes it very un-Russian. There is the market it works in, which has growth opportunities not open to the natural resources giants. And there is its management structure -- as Norwegian, or American, as it is Russian - led by former Soviet "star wars" scientific adviser Dmitry Zimin, and with Jo Lenders, from strategic partner Telenor of Norway, as chief executive officer. Vimpelcom has issued IAS accounts since its foundation in 1994 and has none of the transparency headaches of other Russian corporates.
In other respects, though, Vimpelcom is Russian enough - for example its revenue per user fell to $43 in March 2000 from a monthly average of $215 in 1998 and $99 in 1999, as the company expanded its lower-margin prepaid business. Another very Russian indicator is Vimpelcom's credit rating, which Standard & Poors' raised to BB- on 28 July, but continues to reflect Russia's poor standing as a sovereign borrower.
Valery Goldin, head of international relations at Vimpelcom, says: "The general economic situation in Russia, and the country's debt rating, are obviously important factors when we choose financing instruments. The situation after the crisis was horrible, but now it's improving. Next year, once the Paris club...