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S&P may downgrade VimpelCom over Weather merger

© RIA Novosti . Ruslan Krivobok / Go to the photo bankAlexander Izosimov, VimpelCom Limited president and CEO
Alexander Izosimov, VimpelCom Limited president and CEO - Sputnik International
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Standard & Poor's international rating agency has placed VimpelCom, one of Russia's top three mobile operators, on review with a Negative outlook over the company's plans to merge with Weather Investments S.p.A., the agency said on Wednesday.

Standard & Poor's international rating agency has placed VimpelCom, one of Russia's top three mobile operators, on review with a Negative outlook over the company's plans to merge with Weather Investments S.p.A., the agency said on Wednesday.

The company currently has a BB+ rating from Standard & Poor's. Moody's rating agency said on Tuesday that it could also downgrade VimpelCom's rating.

VimpelCom signed a $6.6 billion merger agreement with Weather Investments S.p.A. on Tuesday to create the world's fifth telecommunications carrier.

S & P said that the deal would considerably increase VimpelCom's consolidated debt, adding that the mobile operator would have to issue new stock and spend a considerable amount of cash, which would create uncertainty about the company's liquidity and its capital structure after reorganization.

MOSCOW, October 6 (RIA Novosti)

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