• Alfa Group to invest US$220 million in aggregate in three tranches: US$103 million through the purchase of 5,150,000 newly-issued VimpelCom common shares (6,866,667 ADSs) and US$117 million directly in VimpelCom-Region
  • Telenor and VimpelCom to maintain options to invest an additional US$117 million directly in VimpelCom-Region

Moscow and New York (May 30, 2001) - Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP), a leading provider of telecommunications services in Russia, today announced that it has signed an agreement with Eco Telecom Limited, part of the Alfa Group of companies in Russia ("Alfa Group"), to purchase strategic ownership interests in both VimpelCom and VimpelCom-Region, a wholly-owned subsidiary of VimpelCom, in order to accelerate the development of VimpelCom's regional GSM license portfolio (the "Transaction"). Telenor East Invest AS ("Telenor"), VimpelCom's strategic partner since December 1998, fully supports and will participate in the Transaction.

The Company also announced that Dr. Dmitri Zimin, VimpelCom's President, has stepped down from his position of General Director. Jo Lunder, former Chief Operating Officer of Telenor Mobil and current Chief Executive Officer of VimpelCom, has also assumed the position of General Director.

VimpelCom has consistently viewed national expansion outside of Moscow as a key strategic growth opportunity although, to date, the majority of VimpelCom's revenues are derived from the Moscow License Area. This strategic partnership with Alfa Group will position VimpelCom to become a leading national cellular operator in Russia, by:

€ Introducing into VimpelCom a strong, well-recognized Russian partner with significant resources and an established record of successfully managing and developing businesses within the Russian environment;

€ Infusing a significant amount of capital and strategic resources to accelerate the development of VimpelCom's regional GSM license portfolio; and

€ Supporting VimpelCom's focused approach to regional expansion through its separately managed subsidiary, VimpelCom-Region.

Under the terms of the Transaction, VimpelCom and VimpelCom-Region will raise up to US$337 million (if Telenor and VimpelCom exercise their options to invest directly in VimpelCom-Region) of financing for regional expansion. VimpelCom is requesting shareholder approval to issue 5,150,000 new common shares (the equivalent of 6,866,667 ADSs) to Alfa Group 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 date of this announcement, for an aggregate consideration of US$103 million. VimpelCom will contribute this US$103 million (together with an additional US$15.8 million of its own funds) 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 one and two years after the closing of the initial investment. 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. If Telenor were to exercise its options to invest in VimpelCom-Region in an amount equal to at least US$58.5 million, VimpelCom would need to exercise at least a portion of its options in order to maintain its majority ownership of VimpelCom-Region.

Alfa Group has also agreed to purchase 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. Following these transactions and the capital increases by VimpelCom-Region, Alfa will own 25% plus one share of VimpelCom's total voting stock and between 25% plus 1 share and 42% of the voting shares of VimpelCom-Region, depending upon whether Telenor and/or VimpelCom exercise their options to invest in VimpelCom-Region.

At the same time as the closing of the initial investment and the purchase by Alfa Group of the shares from Dr. Zimin, Telenor has agreed to purchase certain treasury shares from the Company and will acquire certain common shares from entities controlled by Dr. Zimin, in order to maintain its 25% plus one voting share stake in the Company, for a total consideration of US$24.7 million. After the sales to Alfa Group and Telenor, Dr. Zimin and his affiliates will continue to own more than 10.4% of VimpelCom's common stock.

The issuance of shares of VimpelCom to Alfa Group and certain other aspects of the Transaction will be subject to the approval of holders of ? of VimpelCom's shares. In addition, the Transaction will be subject to various Russian regulatory approvals, including the Ministry for Anti-Monopoly Policy of the Russian Federation and the Russian Federal Commission on Securities Markets, as well as other customary closing conditions. The Transaction will also be subject to clearance from the Directorate General - Competition of the Commission of the European Communities. Subject to obtaining the necessary shareholder and regulatory approvals, the Company anticipates closing the first tranche of the Transaction no later than November 30, 2001.

The VimpelCom Board of Directors has received a "fairness opinion" on the financial terms of the Transaction from UBS Warburg, the Company's financial advisor on the Transaction. The Board of Directors is recommending the Transaction for approval by VimpelCom's shareholders at the forthcoming Extraordinary General Meeting of Shareholders to be held in Moscow on July 27, 2001.

In connection with the Transaction, a new slate of candidates for the Board is being presented for shareholder approval: Augie K. Fabela II, VimpelCom's Co-Founder and Chairman since 1995, who has accepted the joint nomination of Telenor and Alfa Group to continue to lead the Board as Chairman; Mikhail Fridman, Chairman of Alfa Group; Gleb Fetisov, President of Alfa Eco; Morten Karlsen Sorby, Chief Operating Officer of Telenor Mobile Communications AS; Bjorn Kopperud, Executive Vice President of Telenor Mobile Communications AS; Stanislav Shekshnya, Chief Executive Officer of Alfa-Eco Telecom; Alexander Shokhin, Chairman of the State Duma Committee for Credit Organizations and Financial Markets; Terje Thon, Chairman of the Board of Dagbladet AS, a Norwegian publishing concern; and Henrik Torgersen, Executive Vice President of Telenor AS.

Commenting on today's announcement, Dr. Zimin said: "We have always allied ourselves with strong and knowledgeable partners to help build VimpelCom into a world-class company. Combining Telenor's expertise in telecommunications and Alfa's knowledge of, and infrastructure in, the Russian regions, we have assembled an extremely powerful team that will lead VimpelCom to become Russia's premier national operator. "

"We are delighted that Alfa Group shares our confidence in VimpelCom", said Tormod Hermansen, Chief Executive Officer of Telenor. "Russia has a population of 145 million people and yet there are only 3.4 million cellular subscribers nationwide. With our new partner, Alfa Group, focusing on accelerating the development of the regions of Russia, we will remain at the forefront of the growth in cellular communications throughout Russia."

Mikhail Fridman, Chairman of Alfa Group, said, "Telecommunications is one of the most dynamically developing sectors in the Russian economy and our investments in VimpelCom and VimpelCom-Region will give us an excellent opportunity to participate in that growth on a national scale. We believe our experience in business development in Russia and Telenor's expertise in modern telecommunications create a very good platform for VimpelCom to take a leading position in Russian telecommunications."

VimpelCom has filed a copy of the materials for the Extraordinary General Meeting of Shareholders, which describes the Transaction in greater detail, with the U.S. Securities and Exchange Commission and the New York Stock Exchange (NYSE). An electronic copy of the shareholder meeting materials will be available for review on VimpelCom's web site in the "SEC Filings" section.

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 is active in the banking, insurance, asset management, oil & gas, real estate and retailing sectors. Alfa Eco is the group's trading and industrial arm with interests in oil, metals, mining, and wholesale. Alfa Bank is one of the largest privately-owned banks in Russia in terms of assets with an extensive nationwide branch network of 51 branches in 26 regions throughout Russia and 4 international branches. Alfa Bank recently acquired 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, headquartered in Oslo, Norway, is an international provider of high quality telecommunications, data and media communication services, with a particularly strong focus on mobile, Internet and broadband services. Telenor Mobile Communications (TMC) - 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 15 mobile companies throughout the world. The total number of subscribers as of year end 2000 was 5.9 million - 2.3 million in Norway and 3.6 million abroad, calculated on the basis of TMC'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 Transaction which is subject to shareholder, 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 Transaction may not be consummated. The forward-looking statements 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. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of unforeseen developments from competition, governmental regulations of the wireless telecommunications industry, general political uncertainties in Russia and general economic developments in Russia and other factors. As a result of such risks and uncertainties, there can be no assurance that the effects of competition or current or future changes in the political, economic and social environment or current or future regulation of the Russian telecommunications industry will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 1999 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)
7(095) 974-5888

Sigrid Peterson
Edelman Financial Worldwide
1(212) 704 8284