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The deal was not approved by the government commission on foreign investment - the Central Bank, the Ministry of Finance and the Ministry of Economy were against it. According to sources of the publication, it was sent for revision "to protect Russian investors who are shareholders of the company." The Dutch Veon Holdings announced the sale of Vimpelcom to management headed by CEO Alexander Torbakhov at the end of November 2022. Veon is 47.9% owned by the company LetterOne created by the founders of Alfa Group. From the point of view of development, this is beneficial for both parties: VimpelCom will not have problems in the future due to a shareholder in an unfriendly jurisdiction - for example, access to government orders will return. Veon will avoid possible sanctions.
The main and most difficult part of the deal is Veon's debt: if the asset is valued at 370 billion rubles, the net debt attributable to it will amount to 240 billion rubles. The Dutch holding, therefore, should receive 130 billion rubles ($2.1 billion), but part of this money will go to pay off Veon's Eurobond debt, Kommersant points out.
With 240 billion rubles of debt, a sanctions conflict arose. The fact is that VimpelCom is buying back Veon Holdings' debt on Eurobonds for replacement bonds issued in Russia, which will actually (albeit temporarily) double its debt burden. But because of the sanctions, there is a risk that depositories Euroclear or Clearstream will not recognize payment on new bonds held in Russian depositories. Thus, it will turn out that the debt will have to be paid to both VimpelCom and Veon, and VimpelCom's payments to foreign investors and Veon to Russian investors will not reach them due to the same sanctions.
Naturally, this does not suit both parties. At the same time, the Russian Ministry of Finance demands that VimpelCom pay off Russian investors, and some investors, including Leader Management Company (manages the assets of NPF Gazfond), are suing for payments by the Russian company. VimpelCom has already filed a lawsuit against the Central Bank, challenging the general principle of repayment by a Russian legal entity of the obligations of a foreign company associated with it.
9.2.11 Mines and Minerals - gold & diamonds
9.2.12 Mines and Minerals - steel & iron
The gold output of Russia’s precious metals miner Polyus fell by 6% on the year to 2.541mn ounces, or 79.043 tonnes, in 2022, the company said in a statement on Tuesday. In 2023, Polyus plans to produce 2.8–2.9mn ounces of gold.
Severstal decreased steel production in 2022 by 8% y/y to 10.69mn
172 RUSSIA Country Report March 2023 www.intellinews.com