Netia takes up the shares in its subsidiary Świat Internet SA
WARSAW, Poland – January 23, 2007 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that on January 22, 2007 it concluded an agreement with one of its subsidiaries operating under the business name Świat Internet Spółka Akcyjna (the “Company”), with regard to the taking up of the shares in the increased share capital of the Company. The agreement has the status of a significant agreement and will effect in the transfer, by Netia, of the in-kind contribution of the telecommunications network elements owned by Netia and including, in particular, telecommunications lines and ducts (the “Contribution”) for the benefit of the Company.
The conclusion of the above mentioned agreement results from the execution of the resolution adopted by the general shareholders’ meeting of the Company, concerning the increase of the Company’s share capital from PLN 174,297,000 to PLN 1,124,999,740, i.e., an increase by PLN 950,702,740, by way of issuing 95,070,274 new, ordinary registered series M shares, PLN 10 par value per share, of the total nominal value of PLN 950,702,740. The increase of the Company’s share capital will be executed through the private subscription, that is the taking up by Netia of all new series M shares in exchange for the Contribution, valuated by a property appraisal expert at the amount of PLN 950,702,740.
The transfer of the ownership of the Contribution to the Company will occur within one month as of the registration in the registry of entrepreneurs of the above mentioned share capital increase of the Company.
The newly issued series M shares taken up by Netia together with the remaining shares of the Company possessed by Netia will represent 99.99% of the Company’s share capital and 99.99% of the overall number of votes at the Company’s general shareholders’ meeting.
The Contribution is related with the intended course of the Company’s development. To date, the Company’s activities have been focused on the provision of complex, value-added telecommunications services based on the independent international Internet lines as well as the Company’s modern IP backbone network. The Company will focus on the acquisition of the ownership of the infrastructural telecommunication assets (cable lines and ducts) of the Netia group companies. This will allow for the unification of the hitherto accounting policy in the scope of the recording of the telecommunication assets, as well as will ensure the more efficient management of the said assets. The above activities undertaken by Netia and the Company do not influence the consolidated financial statement of Netia.
The Company’s shares to be taken up by Netia were classified as material assets, and the agreement referred to above was classified as significant, based on the criterion of their value towards the current value of Netia’s equity (above 10%).
The gross book value of the Contribution as at December 31, 2006 disclosed in Netia’s accounts equals PLN 1,797,938,828.52; the accumulated depreciation of the assets composing the Contribution equals PLN 545,201,704.21 as at December 31, 2006; and the accumulated impairment recognized until December 31, 2005 amounts to PLN 470,101,177.88. The Contribution is brought to the Company in the value resulting from the valuation conducted by a property appraisal expert.
The elements of the telecommunications network composing the Contribution were, prior to their transfer to the Company, used to carry out the telecommunications activity of Netia, and would be used in the same manner in the Company in the future.
The Company is an affiliate of Netia (a subsidiary company – Netia owns the shares representing 99.99% of the share capital of the Company as well as 99.99% of the overall number of votes at the Company’s general shareholders’ meeting). Pro Futuro SA, Netia’s wholly owned subsidiary, is the second shareholder of the Company, whose shares represent 0,01% of the Company’s share capital and 0,01% of votes at the general shareholders’ meeting. Moreover, the following persons being members of the bodies of the Company also serve in Netia’s bodies: Mr. Piotr Czapski, Mr. Paul Kearney and Mr. Jonathan Eastick – as management board members in both Netia and the Company; Mr. Piotr Nowak - as a proxy in Netia and a management board member in the Company; Mr. Paweł Karłowski and Mr. Tom Ruhan - as management board members in Netia and supervisory board members in the Company.