Acquisition of Tele2 Polska sp. z o.o. (signing of a material contract) (35/2008)
WARSAW, Poland, 30 June 2008: Netia SA (the “Company”), Poland’s largest alternative provider of fixed-line telecommunications services, announced that on 29 June 2008, the Company concluded an agreement to buy a 100% interest in Tele2 Polska sp. z o.o, with its registered seat in Warsaw (“Tele2”) from Tele2 Sverige AB, a company incorporated under the laws of Sweden (the “Seller”).
Following negotiations, the Company and the Seller signed a binding agreement in which the Seller agreed to sell to the Company 1,000 shares in Tele2, representing 100% of Tele2’s share capital (the “Agreement”), on the following terms:
(i) a price of Euro 31,385,000 payable in cash on closing, to be adjusted for the difference between actual net cash and net working capital levels and their respective target levels (amounting to 2,285,000 Euro with respect to net cash);
(ii) an additional amount payable to the Seller in installments within 12 months from closing in accordance with the formula set forth in the Agreement but not exceeding Euro 4,800,000;
(iii) a contractual penalty in the maximum amount of Euro 8,000,000 in the event the Seller violates the prohibition on competition in the territory of Poland within three years from the closing of the transaction. The contractual penalty does not preclude the possibility of suing for damages suffered.
The transaction described above values Tele2’s enterprise at between Euro 29,100,000 and 33,900,000, depending on the level of additional payments (point (ii) above).
The completion of the transaction is dependant, among others, on the satisfaction of the following conditions precedent:
(i) the Company obtains a decision from the President of the UOKiK granting consent for the acquisition of Tele2;
(ii) the take over by the Company of obligations under the guarantee issued by Tele2 for the benefit of Polkomtel SA; and
(iii) there is no material adverse change.
Pursuant to the Accession, Amendment and Restatement Agreement (the “Amendment Agreement”) of 27 June 2008 (see Current Reports: No. 53/2007, dated 15 May 2007 and No. 34/2008, dated 27 June 2008) the Company is entitled to the increased financing facility granted by the consortium of the banks in the amount of PLN 100 million (increase of PLN 275 mln facility to PLN 375 mln) for the acquisition of Tele2. The additional facility is conditional upon the satisfaction of certain conditions precedent, including, pledging Netia’s enterprise, which itself requires a Shareholders’ Approval and the closing of the acquisition of Tele2.
Conference call on the acquisition
Netia senior management will host a conference call at 10:00 am (CET) / 9:00 am (BST) / 4:00 am (Eastern) on Monday, 30 June 2008 to discuss the acquisition of Tele 2. The conference call may be accessed by dialing (UK) +44 20 8515 2302 or 0800 279 2280 / US +1 480 629 1990 or 1 800 762 8932. A telephone replay will be available shortly after the call, until Monday, 14 July 2008 at (UK) +44 207 154 2833 or 0800 358 3474 / US +1 303 590 3030 or 1 800 406 7325, passcode 3896059#. A replay of the conference call will be available on Netia’s website at www.investor.netia.pl.
In addition, a presentation on the above transaction is available on Netia’s website at www.investor.netia.pl.