Reinventing VimpelCom
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Structural improvements

VimpelCom believes that it needs to make further structural improvements, although the most important steps have already been taken over the past two years to address the capital structure. This will remain a focal point going forward.

Structural improvements

In 2014-2015 VimpelCom (re)financed a total of USD 26 billion in debt, reducing the cost of debt to 6.3% (from 8.2% in 2014) and substantially extending its debt maturity schedule. Also in 2014, VimpelCom secured a revolving credit facility with its core relationship banks for USD 1.8 billion based on its own credit strength, substantially improving its liquidity profile.

In addition, in 2015, VimpelCom announced two major transactions that served to optimize its capital structure. Firstly, after the successful closing of the transaction in Algeria, a bond tender for USD 1.8 billion was successfully executed. Next to the tender, USD 500 million was repaid under the revolving credit facility and Rouble bonds were also bought back at a time when interest rates reached 20% and above.

Secondly, through the three successive refinancings of the WIND debt in 2014 and 2015, a more sustainable capital structure was created. The agreement to form a joint venture, combining the businesses of WIND and 3 Italia in Italy, will further reduce VimpelCom’s Net debt to EBITDA ratio substantially.

Treasury saves hundreds of millions with debt refinancing

Over the last two years, VimpelCom’s Group Treasury, in close cooperation with local teams, has successfully (re)financed USD 26 billion of debt, resulting in approximately USD 1 billion in annual savings that have gone straight to the bottom line.

“Our core role in Group Treasury is about ensuring the continuity of the Company – making sure there is always enough liquidity and funding for future growth – while at the same time, optimizing our overall capital structure,&rquo; said Albert Hollema, Group Director Treasury.

“Our proactive approach has certainly benefited the Group and its businesses. Lowering interest expenses leads to increased cash flows and provides the opportunity to be more resilient against the macroeconomic shocks which we’re currently experiencing in most of our markets. In this sense you could say we acted at the right moment, when credit markets were in general wide open and very receptive to VimpelCom’s refinancings.&rquo;

Group delivering on structural improvements

2015 Milestones

  • Refinancing for USD 5 billion
  • Reduction in interest costs of USD 200 million
  • Algeria transaction completed