WARSAW, Poland - May 20, 1999
Netia Holdings SA announced today that EM Warburg, Pincus & Co. LLC has agreed to make a $50 million investment in the company's common stock subject to successful completion of a debt financing that the company is presently contemplating. Upon completion of the transaction, Warburg, Pincus will acquire a 12.4% equity interest in Netia and will have the right to appoint a representative to Netia's Supervisory Board. EM Warburg, Pincus & Co. is a major global private equity investment firm managing approximately $7.5 billion of investments, with a further $5 billion available for investment. Netia is the largest alternative fixed-line telecommunications operator in Poland. As of March 31, 1999, the company had 306,843 connected lines, and a cumulative business/total customer mix of 16.7%.
Proceeds from the equity investment will be utilized to fund the continued expansion of Netia's network in the company's 23 license areas, which cover approximately 13.4 million people, representing 33% of the Polish population, including five of Poland's ten largest urban areas (Gdansk, Poznan, Katowice, Krakow and Lublin). In April, Netia secured the benefit of a license to provide Internet and data transmission services throughout Poland.
"We are delighted with Warburg, Pincus' investment and commitment to Netia," said Meir Srebernik, Netia's Chief Executive Officer. "We believe that the investment reinforces Netia's competitive position in Poland. As a leading supplier of a broad range of both voice and data services, we intend to aggressively pursue our strategy of targeting large and medium-sized businesses throughout Poland."
Roberto Italia of Warburg, Pincus said, "We are very pleased to have this opportunity to invest in Poland, one of the most attractive telecommunications markets in Europe. We believe that Netia is uniquely positioned to become the leading competitive provider of a whole range of innovative as well as basic telecommunications services, addressing business and residential customers across the country."
The investment by Warburg, Pincus follows a recent $49.2 million additional investment made by Telia earlier this month. Telia, the national telecommunications operator of Sweden, is the largest single shareholder in Netia with a 42.3% equity interest in the company prior to the Warburg, Pincus investment.
Kaj Juul-Pedersen of Telia and Chairman of Netia's Supervisory Board said, "Poland is very important in Telia's Baltic Sea region strategy. We will continue to support Netia in its drive for leadership and we welcome our new partner."
Chase Securities Inc. acted as sole placement agent to Netia in relation to the investment by Warburg, Pincus.