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05 Nov 2001

VimpelCom closes first tranche of investment from Alfa Group and Telenor to accelerate national expansion

US$103 Million investment completed

Moscow and New York (November 5, 2001) - Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP) today announced the closing of the first tranche of its transaction with Eco Telecom Limited, part of the Alfa Group of companies in Russia ("Alfa Group"), which resulted in Alfa Group acquiring a strategic ownership interest in the Company. Today, Alfa Group paid US$103 million to VimpelCom in exchange for 5,150,000 newly-issued common shares (the equivalent of 6,866,666 ADSs) at a price of US$20 per common share (US$15 per ADS), approximating the weighted average closing price of VimpelCom's ADSs on the New York Stock Exchange during the 30 trading days prior to the signing date of the transaction, May 30, 2001.

Under the terms of the transaction signed on May 30, 2001, VimpelCom and VimpelCom-Region, VimpelCom's wholly-owned subsidiary for the development of its regional GSM license portfolio, will raise up to US$337 million (if Telenor East Invest AS ("Telenor") and VimpelCom exercise their options to invest directly in VimpelCom-Region as discussed below) of financing for national expansion. Today's US$103 million investment by Alfa represents the first tranche of this investment. VimpelCom has contributed this US$103 million as equity to VimpelCom-Region. In addition, approximately US$117 million will be raised directly by VimpelCom-Region through two capital increases to be subscribed by Alfa Group on the first and second anniversaries of today's closing. Furthermore, Telenor and VimpelCom have options, either collectively or individually, to invest up to an aggregate of US$117 million directly in VimpelCom-Region simultaneously with Alfa Group's second and third contributions.

In addition to Alfa Group's purchase of newly-issued shares from VimpelCom, Alfa Group today purchased 6,426,600 preferred shares and 113,102 common shares (the equivalent of 150,803 ADSs) of VimpelCom, for an aggregate consideration of approximately US$26.9 million, from entities controlled by Dr. Zimin, VimpelCom's founder and President. Furthermore in order to maintain its stake in VimpelCom, Telenor purchased 3,744 treasury shares (the equivalent of 4,992 ADSs) from VimpelCom for a purchase price of approximately US$74,880 and 1,233,369 common shares (the equivalent of 1,644,492 ADSs) from entities controlled by Dr. Zimin, for approximately US$24.6 million. As a result of these transactions, Alfa Group owns 25% plus two shares of VimpelCom's voting stock and Telenor owns 25% plus thirteen shares of VimpelCom's voting stock. After the sales to Alfa Group and Telenor, Dr. Zimin and his affiliates continue to own more than 10.4% of VimpelCom's common stock (or 9.0% of VimpelCom's voting stock).

Commenting on today's announcement, Augie K. Fabela II, Chairman of the Board of VimpelCom, said, "Today's closing formalizes the establishment of a powerful strategic partnership between VimpelCom, Telenor and Alfa Group, that will focus on developing Russia's premier national telecoms operator. Combined with our demonstrated financial performance of growing revenues and EBITDA, we believe that this partnership will create great value for our shareholders."

Mikhail Fridman, Chairman of Alfa Group, said, "With the Russian economy continuing to grow strongly, we believe more than ever that telecommunications in Russia offers tremendous growth potential and we are committed to participating in further developing VimpelCom's great potential as a national player."

The Alfa Group of Companies was established in Russia in 1988 and has evolved today into one of Russia's largest financial industrial groups. Alfa Group Consortium is active in the banking, insurance, telecommunications, asset management, oil, gas and other primary commodities, food and retail sectors. Alfa Eco is the group's main trading and industrial arm with interests in oil, metals, mining, telecommunications, foodstuffs and beverages. Alfa Bank is the largest privately-owned bank in Russia with an extensive nationwide network of more than 70 branches, and subsidiaries in Ukraine, Kazakhstan, the United Kingdom, the United States and the Netherlands. Alfa Bank holds a strategic stake in Golden Telecom (NASDAQ: GLDN), a provider of integrated telecommunications services throughout Russia and other countries of the Commonwealth of Independent States.

Telenor ASA, headquartered in Oslo, Norway, is an international provider of high quality telecommunications, data and media communication services. Telenor Mobile - the mobile business area of Telenor - is one of the world's most advanced mobile operators with a leading position in the Norwegian market and with ownership in 14 mobile companies throughout the world. The total number of mobile subscribers as of September 30, 2001 was 5.6 million - 2.2 million in Norway and 3.4 million abroad, calculated on the basis of Telenor Mobile's ownership interests in each company. Telenor is listed on the Oslo Stock Exchange (TEL) and on NASDAQ in New York (TELN).

VimpelCom is a leading provider of telecommunications services in Russia, operating under the "Bee Line" family of brand names, which are among the most recognized brand names in Russia. The VimpelCom Group's license portfolio covers approximately 70% of Russia's population (100 million people), including the City of Moscow and the Moscow Region. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange ("NYSE"). VimpelCom's ADSs are listed on the NYSE under the symbol "VIP". VimpelCom's convertible notes are listed on the NYSE under the symbol "VIP 05".


This press release contains "forward-looking statements", as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate, in part, to the consummation of the additional phases of the transaction described herein which are subject to regulatory and certain other approvals, as well as certain other conditions precedent. If any of the approvals are not obtained or any condition precedent is not met, the additional phases of the transaction may not be consummated. These statements also relate to the Company's development and are based on Management's best assessment of the Company's strategic and financial position and of future market conditions and trends. Certain factors that could affect this transaction and the Company's development include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2000 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.


For more information, please contact:
Valery Goldin

VimpelCom (Moscow)
Tel: 7(095) 974-5888

Sigrid Peterson
Edelman Financial Worldwide
Tel: (212) 704-8284