In an unexpected move, VimpelCom said it would not be paying a dividend for 2013 and would reduce payments to shareholders for 2014.

The Amsterdam-headquartered group, which is the largest operator in Russia, and has operations in Europe, Asia and Africa, said the move was aimed at reducing its net debt.

From 2014, the company aims to pay an annual dividend of $0.035 per share until the group achieves a net debt to EBITDA ratio of less than two times.

The company’s original dividend guidance from 2014 was for a payment of at least $0.80 per share. It originally said it would pay a dividend of $0.45 per share for 2013.

The unexpected dividend cuts took shareholders by surprise. According to Reuters, VimpelCom’s American Depositary Receipts — the securities of a non-US company that trades in the US financial markets — opened on New York’s Nasdaq at $10.14, down 13 per cent.

Anna Lepetukhina, analyst at Sberbank, told Reuters that the move to cut dividends may partly be explained by VimpelCom’s difficulties in Italy and Algeria.

In Italy, the company has been hurt by reduced mobile termination rates while it has been involved in drawn-out negotiations with the Algerian government over the sale of its stake in Djezzy.

Perhaps trying to reassure investors, Jo Lunder, VimpelCom CEO (pictured), said the group “continues to have an attractive combination of mature, strong cash-generating businesses and solid emerging market growth opportunities”.

For 2014, VimpelCom is targeting stable revenues and EBITDA and looking to reduce its net debt to EBITDA ratio to 2.3. It also wants to achieve a capex to revenue ratio of around 21 per cent.