Americans and Bermudians alike into a state of frenzy. But not any more. In fact, it is in danger of becoming a common occurrence.

In July, a party of Russians visited the Island to sign a multi-million dollar oil pipeline deal which Bermuda-based oil magnate Mr. John Deuss helped set up.

Now a new exempted company, called American Russian Cosmos (ARC), has been formed in Bermuda and looks certain to transform the business practices and the lives of ordinary citizens of every country which made up the former Soviet Union, and bring them into line with the western world.

ARC is a joint venture between another Bermuda-based firm, American-owned Friends Trading Corporation, and Russia's largest business association, Inform Cosmos, which is owned by four major scientific and industrial corporations and a bank. It currently employs in the region of 230,000 people.

The company has been set up to create, operate and market a satellite communications system for businesses and governments.

The system will have a direct effect on the lives of hundreds of millions of people who, for the first time, will be able to use an efficient telephone system and receive high quality television transmissions.

According to the two American entrepreneurs who instigated the deal, Dr.

Gilbert D. Beinhocker and Mr. Gregory P. Plunkett, who run Bermuda-based Friends Trading Corporation, the potential and importance of the new venture is immeasurable.

Both men were in Bermuda last week attending to some of their many business interests on an Island they have visited hundreds of times over more than 30 years.

Mr. Plunkett is joint chairman of ARC with Russian Dr. Igor S. Tsyrlin. Dr.

Beinhocker is the company's president and chief executive officer.

"We've done a number of mega projects together in previous years but this surpasses anything either of us has ever been involved with,'' said Dr.

Beinhocker, who described himself and his partner as "pathfinders''.

"This is not just another deal. It has special and unique attributes and will be far in excess, in terms of financial parameters, of anything we have ever done.

"This is literally an enterprise without any discernible boundaries in terms of revenue projections.'' Mr. Plunkett said that initial revenue projections for the project are anywhere between $1 billion and $2 billion.

ARC expects to launch its first Ekspress communications satellite in January, 1994, to be quickly followed by others.

"The Ekspress system will bring a modern communication system to Russia and all the former Soviet Union nations, supplying telephone and telegraphic communications, television broadcasting and various digital data transmission applications,'' said Dr. Beinhocker.

"This will be a highly sophisticated system that will meet the domestic needs of Russia and the Commonwealth of Independent States and will have nodes that will interface into the global telecommunications network.'' In short, it will bring all the former Soviet Union countries into better contact with the rest of the world and have consequences of immense magnitude.

At the moment, communicating with the outside world is a frustrating and, often impossible, task for many former Soviets.

Telephone calls are frequently misdirected, interrupted and cut off in mid conversation and the facsimile service is just as bad.

In Russia, there is a three year waiting list to even take delivery of a telephone.

One of its top hotels, the 400-room President's Hotel in Moscow, only has one overseas line for its customers.

Guests have to wait in line for interminably long periods to use the phone and then, if they're lucky enough to be connected properly, must carry on a conversation which everybody waiting in turn behind them can hear.

"What should be a three minute operation can easily turn into a two hour siege,'' said Mr. Plunkett who knows what he's talking about since he and his partner have stayed at the hotel during their many visits to Russia this year.

"Local communications are even more difficult and less reliable. You have an eerie feeling of being in a time warp. The buildings are out of the 1920s and the telecommunications from the 1950s.

"Our system will allow the Russians to come into the twentieth century immediately.'' The satellite system is being developed by some of the world's top scientists, all based in Russia, many of whom have been involved in the past with the space programme of the former Soviet Union.

"Inform Cosmos will provide all the scientific and engineering know how to put the satellite systems in commercial operation subsequent to launch and placement in orbit,'' said Dr. Beinhocker.

"Inform Cosmos is a world class company and is staffed by a number of world class scientists and engineers who are as good in quality and talent as any of the highly skilled professionals we find in America and other western countries.'' For the first time, these highly trained individuals are about to be paid sums of money commensurate with their abilities, he said.

He added: "They're very concerned about the future of their country and their individual careers and futures.

"They too see the great financial opportunities in developing these resources in collaboration with western interests.'' The principal role of Friends Trading Corporation (FTC) is to develop an overall business strategy and to implement any operations that are necessary to make the venture profitable.

FTC's responsibilities will include marketing and arranging for working capital to pay for equipment and all aspects of the project.

Bermuda stands to benefit in a number of ways from being ARC's domicile, since the company will have a physical presence on the Island and will not just simply exist as a file collecting dust in the drawer of an attorney's office.

Plans are currently underway to locate corporate and administrative offices in Bermuda. It is not yet known how many people will be employed there.

"The Russians are looking forward to coming to Bermuda for business trips,'' said Mr. Plunkett. "We expect a group of them to visit the Island with us in the near future.'' Bermuda was not the first choice of the Russians, who are not overly familiar with the business facilities on the Island, but they were talked around by the two Americans.

"We recommended Bermuda and they agreed,'' said Dr. Beinhocker. "We have business activities all over the world and have had for years but, for us, Bermuda is the prime offshore location. We love it.

"There was never any doubt in our minds that Bermuda was the most appropriate domicile for our partnership.'' Added Mr. Plunkett: "Being domiciled in Bermuda gives ARC a certain lustre that it would not have had if it was based anywhere else.'' The businessmen, who design and implement large business undertakings all over the world, did not rule out future joint American/Russian enterprises being set up in Bermuda.

"There's a whole new entrepreneurial spirit emerging in Russia,'' said Mr.

Plunkett. "There are many excellent business opportunities in that area of the world.'' Never a pair to miss a good business opportunity, the story of how they got ARC off the ground is a tale of dogged entrepreneurialism.

Dr. Beinhocker said: "We became highly interested in the business opportunities that would present themselves with the break-up of the Soviet Union, especially as it began to escalate at the end of 1991, right after the coup, when it was apparent the Soviet Union, per se, wouldn't survive as a national structure.

"Greg and I went to Russia in early 1992 to put together a business project which, for timing reasons, did not come to fruition.

"While over there and having the opportunity to meet many people who were well positioned both in industry, commerce and Government, we began to gain a greater understanding of the magnitude of business opportunities that would be made available to western businessmen provided they would be willing to put in the hard work and bear the frustrations of nursing the deal micro step by micro step in a coherent strategy.

"For us the big choice was to locate the appropriate project. Fortunately, they came into contact with a Russian speaking Californian called Mr. Tristan Del, who put them in contact with the right people and helped cut through the cultural barrier. Mr. Del is now ARC's executive vice president.

"Through Tristan Del, we had the opportunity to make the acquaintance of the senior management of Inform Cosmos,'' said Dr. Beinhocker.

"It became abundantly clear to us after our first meeting it would be a magnificent opportunity open to us if we could develop the relationship and structure a commercially feasible business plan to meet their objectives in developing and bringing to market vast telecommunication resources that were satellite based.

"We spent many hours and had many meetings developing our relationships, mutually gaining the trust and respect of one another and proceeding to develop a strategy that would meet the singular goal of making available for hard currency revenues the use and application of telecommunications satellite systems.

"The results of our mutual efforts with our Russian colleagues resulted in a joint venture agreement being concluded in Moscow on June 29, 1992, which provided for the formation of an offshore company in Bermuda.'' ARC's incorporation and legal affairs in Bermuda are being handled by Hall, Duncan and Trott.

Partner Mr. Perry Trott, who is ARC's secretary, said: "From our point of view, we're delighted and excited to be the legal representatives for a company involved in such an exciting and unique venture.

"There are many benefits for Bermuda, including the future creation of jobs with the opening of an office here and foreign currency earnings potential for the Island.

"Also, by having its name associated with a deal of this magnitude, Bermuda's reputation around the world will be enhanced.''