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15 June 2000

Netia commences trading in rights to shares on Warsaw Stock Exchange

Warsaw, Poland - June 15, 2000 - Netia Holdings S.A. (Nasdaq: NTIA), Poland's largest alternative fixed-line telecommunications operator, today announced that trading in the rights to purchase newly issued Series G shares of Netia has commenced on the Warsaw stock exchange. The 2,250,000 newly issued series G shares, out of which 1,125,000 were offered in the form of ADSs, were priced on June 1, 2000 at PLN 110 per share (with a 30% discount on 50,000 shares sold to employees) and US$25 per share, respectively. Full trading in the actual shares will commence when the newly issued shares are registered by the Commercial Court in Warsaw, which is expected to occur within the next several weeks.

The successful Polish listing and offering was made through a consortium managed by Polish brokerage houses CDM Pekao Securities S.A. and DI BRE Bank S.A. The offering, which was one of the biggest private, non-privatisation offerings, was two times oversubscribed by Polish individual and institutional investors.

Meir Srebernik, President & CEO of Netia Holdings, commented: "Netia's listing on the Warsaw Stock Exchange is another milestone for the company's relationship with the Polish financial and business community and we believe that it should improve liquidity of Netia's shares. This successful offering underscores Poland's development as a dynamic capital market and gives encouragement to promising Polish companies seeking to fund their growth.

"Netia is rapidly putting in place the network, technologies and service infrastructure to support the company's success as Poland's leading national alternative provider of voice, data and IP services to businesses and high-end residential customers. We greatly appreciate the strong and enthusiastic support given by the Polish and international financial markets to Netia's vision of leadership in the Polish telecommunications market."

Netia's shares have been trading in ADS form on Nasdaq since July 1999. Following the Warsaw listing, a take-up of 2,250,000 newly shares by Telia AB of Sweden and the public offering of a further 1,125,000 shares in ADS form on Nasdaq (plus 160,000 shares sold pursuant to an over-allotment option), Netia currently has a total of 31,419,172 shares outstanding.

Successful Financings Raise Nearly $300 Million; Strategic Partnership with Telia Reinforced

In total, Netia has raised nearly $300 million in new equity and debt proceeds in recent transactions, which will be applied towards the build-out of Netia's network, payment of license fee obligations and for general corporate purposes.

Avi Hochman, Chief Financial Officer, said, "Thanks to this very successful round of financings, Netia's business plan is fully funded for all current projects, including the construction of our nationwide inter- and intra-city fiber-optic network, our entry into the metropolitan Warsaw local voice market, and the launch of nationwide domestic long-distance, data and InterNetia-branded IP services. The financing mix of $111 million in new equity plus greater-than-anticipated proceeds of EUR 200 million from the Senior Notes offering results in an optimized debt-to-equity ratio, and meets our stated goal for Netia's capital structure."

Public offering of shares raised $111.4 million in additional equity

The Polish and ADS offerings, together with the purchase of shares by Telia AB resulted in the issuance of 4,500,000 shares and brought gross proceeds of $111.4 million.

On June 7, 2000 Netia completed its public offering of 1,125,000 American Depositary Shares (ADS), sold to international investors on June 2, 2000. Netia's ADS, each equivalent to one common share of the Company, was issued at a price of $25 per ADS. The transaction was 3.5 times oversubscribed and raised net proceeds of over $27 million.

The ADS offering was made through an underwriting group managed by Donaldson Lufkin & Jenrette as global coordinator, with CA IB Investmentbank, DLJdirect Inc and HSBC Investment Bank. Certain existing shareholders of the Company have granted the underwriters of the international offering an option to purchase up to 160,000 secondary shares to cover over-allotments. The option was exercised on June 9, 2000.

Senior Notes offering successfully raised EUR 200 million

Concurrently with the above equity transactions, on June 9, 2000 Netia completed an international offering of the 13.75% Senior Notes due 2010 in the amount of EUR 200 million issued and sold on June 2, 2000 by Netia Holdings II B.V., a wholly owned subsidiary of Netia Holdings S.A. and guaranteed by Netia Holdings S.A.

Due to high investor interest in the offering of Senior Notes, Netia increased the aggregate amount of the Notes being offered to EUR 200 million from the EUR 150 million originally contemplated. The Senior Notes have been assigned a "B+" rating by Standard & Poor's, Fitch IBCA and Duff & Phelps Credit Rating Service, and a "B2" rating by Moody's Investor Service.

The Senior Notes were offered through a syndicate of Donaldson, Lufkin & Jenrette, Chase Manhattan International Limited, Bank of America International Limited, Dresdner Kleinwort Benson and ING Barings.

Telia strategic interest in Netia increased to 47.3% with $55 million in new share capital

On June 7, Telia AB, strategic partner of Netia Holdings S.A., purchased 2,250,000 of Netia's ordinary shares at PLN 107.25 per share. Following that transaction and the completion of an agreement in May, 2000 to purchase 4.9 million shares from existing principal shareholders of the Company at $35 per share, Telia is poised to own approximately 47.3% of the outstanding capital stock of Netia.

The Telia offering was made through the same consortium as the Polish listing, led by CDM Pekao S.A., DI BRE Bank S.A. and BRE Bank S.A.

Kaj Juul-Pedersen, Chairman of Netia's Supervisory Board, commented: "Telia's strategic partnership with Netia is a cornerstone of its vision as the Baltic Sea region's leading telecommunications group. The growth of the Polish telecommunications market is phenomenal, even compared to the country's strong economic outlook. With this additional investment, Telia reinforces its commitment to Netia's long-term success for investors, customers and employees."

About Netia

NETIA HOLDINGS is the largest alternative fixed-line telecommunications operator in Poland. In March 2000, Netia won the tender for the Warsaw voice telephony license. Including Warsaw, Netia has 24 licenses for local telecommunications services in territories covering some 15 million people or approximately 40% of the Polish population. The Company's existing local telephone license territories cover five of the country's ten largest urban areas including Krakow, Poznan, Gdansk, Lublin, Katowice and several territories surrounding the city of Warsaw. Netia has also secured the benefit of a nationwide data and IP license to provide data transmission and Internet-based services. In May 2000 the Netia 1 consortium was issued the nationwide domestic long distance voice license.


Copies of the prospectuses which contains detailed information about the Company can be obtained at Netia's website www.netia.pl.