Vimpelcom Buys Euroset Stake

MOSCOW and NEW YORK -- Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) (NYSE: VIP) today announced that it has acquired 49.9% of Morefront Holdings Ltd, a company that owns 100% of the Euroset Group (“Euroset”), from Rambert Management Ltd, a company controlled by A&NN Capital Management Fund, for approximately US$226 million. VimpelCom as a minority shareholder does not expect to consolidate Euroset results and will not guarantee any of its obligations. In addition, as part of the transaction, VimpelCom has agreed on put and call arrangements, exercisable after three years, with respect to a further 25% of the shares of Morefront Holdings Ltd. owned by Rambert Management Ltd.

Commenting on today’s announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said,

“Historical analysis across multiple markets shows that the level of importance of retail networks rises during challenging market conditions. Hence, it is in our best interest to forge solid relationships with the retail operators at this point in time. We believe that acquiring a stake in a leading retailer, like Euroset, will allow us to strengthen our competitive position and to stabilize the market. Clearly, the financial crisis does require from every company a very careful approach to managing its financial exposure and this deal has been completed after very intense and careful analysis. As a result, we are quite confident that this transaction is not going to jeopardize the financial viability of VimpelCom”.

Vimpel-Communications (NYSE: VIP)