MegaFon Raises $541M

MOSCOW -- MegaFon announces the successful negotiation and execution of agreements with a number of major international financial institutions for 541.5 million US dollars in funding to support its network infrastructure development in Russia. MegaFon has signed the first revolving medium term credit facility entered into by a Russian telecommunications company. The facility, which permits MegaFon to repay and reborrow at its discretion at any time, is for a maximum amount of USD 220 million, has a term of 3 years and is unsecured. The joint bookrunners for the facility are Citibank, N.A. and ING Bank N.V., which lead a consortium of eight mandated lead arranging banks together with a select group of participating banks.

MegaFon also entered into a 6-year USD 321.5 million credit facility with essentially the same consortium of banks. This facility is specifically structured to finance the purchase of Nokia equipment and is guaranteed by Finnvera, the Finnish export credit agency.

Additionally, the Company is pleased to announce that it has successfully completed the process of renegotiating its existing export credit facilities. As a result, these facilities will become unsecured and approximately $300 million worth of network equipment currently securing these facilities will be released immediately.

Lastly, the Company’s 2004 export credit transactions, closed with Citibank and ING as lead arrangers, have recently been named “Deal of the Year 2004” by Euromoney Trade Finance Magazine, the leading structured trade finance industry publication. These export credit transactions aggregate USD 183 million and are guaranteed by Finnvera and EKN, the Finnish and Swedish export credit agencies, respectively.

“Today, the Russian telecommunications market is one of the most promising and fastest growing markets in the world, and MegaFon is the market leader,” says Sergey Soldatenkov, CEO of MegaFon. “Our success in arranging the financings provided by these leading international banks demonstrates both the trust and goodwill that MegaFon has built with its strong track record to date, and also the continued interest of foreign investors in the Russian market.”

MegaFon