WARSAW, Poland – September 30, 2005 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that Świat Internet S.A. with its seat in Warsaw (“Świat Internet”), Netia’s subsidiary, purchased from HFC Inwestycje Sp. z o.o. with its seat in Warsaw (“HFC Inwestycje”), 61,000 shares of HFC Internet Sp. z o.o. with its seat in Warsaw (“HFC Internet”), with a total nominal value PLN 3,050,000, representing 100% of the share capital and authorizing their holder to exercise 100% of votes at the shareholders’ meeting of HFC Internet.
The shares have been purchased based on a share purchase agreement for the total price of PLN 3,050,000. The value of the transaction does not exceed 10% of the value of the equity of Netia. Świat Internet financed the purchase from its own funds received through a loan granted on September 30, 2005 by Netia Świat S.A. with its seat in Warsaw (“Netia Świat”), its parent entity. The loan was granted in the amount of PLN 3 mln with interest per year equal to the annual WIBOR rate increased by 2 percentage points. In order to perform its obligation under the loan agreement, the lender has transferred to the borrower receivables with the nominal value of the main receivable of PLN 3 mln. At the same date, prior to the loan indicated above, Netia Świat received a loan from Netia, its parent company, on the same terms and conditions as described above.
The investment in HFC Internet shares has a long-term nature. Neither Netia nor the members of its management or supervisory bodies have any relations with HFC Inwestycje or the members of its respective management or supervisory bodies.