Russia's VimpelCom to buy Armenian operator for $436 mln

MOSCOW, November 3 (RIA Novosti) - Russia's second-largest mobile operator, VimpelCom [RTS: VIMPG], has signed a deal with Greece's Hellenic Telecommunications Organization (HTO) to acquire 90% in Armenia's leading phone company Armentel for 341.9 million euros ($436 million), the company said Friday.

HTO bought Armentel in 1997 for $142.5 million and invested a total of $300 million in the company.

Today, the company accounts for 40% of the Armenian telecommunications market, operating in the GSM 900 and CDMA standards. Its client base comprises about 600,000 fixed-line and 400,000 mobile service subscribers. The company's earnings in 2005 stood at 110 million euros ($140 million).

VimpelCom, which outpaced the Russian mobile market leader MTS [RTS: MTSS] at the tender, undertakes to pay the Armenian company's liabilities, which amount to about 40 million euros ($51 million).

The deal is expected to be completed late this year, if the government of the Caucasus state, which owns 10% in Armentel, approves it, and other issues are settled.