Russia’s VimpelCom announced on April 26 that it had agreed with its local partner in Vietnam on a financing plan for its Vietnamese joint venture, GTEL-Mobile by funding its total investment capital up to $500 million through 2013.
VimpelCom agreed to invest another $304 million under this plan, which would increase its economic interest in GTEL-Mobile, the Beeline operator, from 49 per cent to 65 per cent. The additional financing and equity increase are subject to satisfaction of certain performance targets by GTEL-Mobile and receipt of further regulatory approvals.
Previously, VimpelCom completed the first stage of the financing plan by paying $196 million for newly issued shares and thereby increasing its stake in GTEL-Mobile from 40 per cent to 49 per cent.
In connection with this investment, the joint venture parties also agreed that VimpelCom will assume operational management of GTEL-Mobile.
“Beeline operator must re-register stakes of both sides in the joint venture to the authorities, however, in principal, the Vietnamese government prefers the local partner to maintain its majority stake or 51 per cent and the foreign holds 49 per cent,” said an official from Hanoi Planning and Investment Department.
In another development GTEL-Mobile also completed to raise its chartered capital to around $90 million. GTEL-Mobile running the Beeline network held only 0.16 per cent of market share in Vietnam’s mobile market at the end of last year.
“We look forward to re-launching our operations in Vietnam and to strengthening our position in the high-potential Southeast Asia cluster. We are confident that we will be able to develop our operations in Vietnam in close cooperation with our partner, GTEL, while taking advantage of the scale and scope of the newly enlarged VimpelCom Group,” said Alexey Blyumin, general director of GTEL-Mobile. – VIR