Vimpel-Communications (VIP)

[eastunder]

-Vimpelcom CEO says less adamant on paying divs
Wed Jan 28, 2009 4:29am EST

http://www.reuters.com/article/marketsNews/idINLS7652020090128?rpc=44&sp=true

* Shareholder views on dividend policy are split

* Reiterates can meet debt payments

* May look at selling rouble bonds

* No need to tap govt bailout fund

* Says 2009 investment plans are uncertain

(Adds quotes, background)

By Guy Faulconbridge

DAVOS, Switzerland, Jan 28 (Reuters) - The chief executive of Russian No .2 mobile carrier Vimpelcom (VIP.N) said on Wednesday he was "less adamant" about proposing the company pay dividends due to a split in shareholder views on the issue.

"I reserve comment on what the management position will be but I am less adamant that we should pay dividends," Vimpelcom Chief Executive Alexander Izosimov told Reuters.

"This is very sensitive. It is not a reflection of the financial position of the company in any way. In many ways, that is stronger compared to November."

In November, Vimpelcom said its management intended to recommend to its board paying dividends for 2008 and it felt comfortable with its ability to meet its debt obligations from its own cashflow [ID:nLP48927].

The company paid a $587 million dividend for 2007.

"People are very split on dividends," Izosimov said.

"Some shareholders say you are viewed as a financially distressed company, and one side says that means you should pay dividends while the other side says you should not.

"I need to understand: will the shareholders benefit more or less by paying dividends?" he said.

"What is important is how the market will interpret the issue -- different shareholders say different things. We could use that money to accelerate debt payments."

Izosimov reiterated Vimpelcom would meet all its debt payments -- which total about $1.8 billion in 2009 -- even if it could not borrow. He said debt payments would total over $2.0 billion in 2010.

"Under the worst scenario, and if there was no possibility of borrowing because there is currently a lack of confidence in the Russian economy and Russian currency ... we will comfortably meet these debt obligations out of our own cash flow," he said.

He said the company may explore selling rouble bonds to change the company's debt structure. He said the bonds would have a maturity of up to three years.

Izosimov said the company had not asked for help from the distributor of Russia's anti-crisis package, Russian state corporation VEB.

"It is just not necessary for us, but it is good for us and the shareholders to know that the state would be behind us if there was some sort of trouble," he said.

Izosimov supported government steps aimed at tackling the crisis, but said banks needed to resume lending to companies to help the economy to recover.

"The biggest thing is how to unplug the banking system so that banks start to give out loans to the real economy, because the money is in abundance in the banking system, but still it doesn't flow," he said.

"There are two issues here: overhang on rouble devaluation -- no one wants to accept the risk -- and the solvency of recipients. And some sort of government guarantee on the side of the recipients could help a lot."

He said Vimpelcom's investment plans for 2009 were uncertain, but added that he saw the economy rebounding faster than after the 1998 crisis [ID:nLS592975].

Vimpelcom's major shareholders include Russian billionaire Mikhail Fridman's business empire, Alfa Group, and Norwegian telecoms company Telenor (TEL.OL). (Writing by Maria Kiselyova; editing by Simon Jessop)