Telenor to sell Comincom and Combellga for a 19.5% stake in Golden Telecom

Press release
4 minute read
MOSCOW, OSLO Telenor announced today that it has signed a Share Exchange Agreement with Golden Telecom, Inc. under which Golden Telecom, Inc. will receive 100% of the shares of OAO Comincom and its wholly-owned subsidiary, OAO Combellga, in exchange for 19.5% of Golden Telecom Inc., calculated on a post-acquisition basis. The transaction will make Comincom and Combellga wholly owned subsidiaries of Golden Telecom, Inc. Based on the current share price for Golden Telecom, Telenor's stake is equivalent to approximately US$220 million.

The transaction will be subject to approval by the appropriate regulatory bodies in the United States, and Russia. It is also subject to financial performance covenants for both parties and the approval of Golden Telecom's shareholders, and Telenor's Board of Directors. It is expected that the transaction will close before the end of 2003.

Golden Telecom, Inc. is the largest alternative provider of voice, data and Internet services in Russia and other countries of the Commonwealth of Independent States (CIS). Following the acquisition of Sovintel last year, the company has a market share of approximately 35% in the business market for voice and data communications, with consolidated revenues of US$199 million in 2002.

The Comincom-Combellga group provides voice and broadband services to corporate customers and is the third largest operator in Moscow. The group achieved a growth rate of 32% in 2002, which resulted in consolidated revenues of US$85 million for 2002 and an EBITDA margin of 33%. Based on Comincom's management accounts for the first 6 months of 2003, consolidated revenues came to US$50 million and during the same period consolidated EBITDA was US$18 million.

Jan Edvard Thygesen, Executive Vice President of Telenor and CEO of Telenor Networks, stated: "This is an excellent deal for Telenor. We are pleased with the way that Comincom and Combellga have developed. With the current consolidation of the Russian telecom industry we have decided that joining forces with Golden Telecom will be an excellent platform for further development. Combining these two businesses with Golden Telecom's creates a company that is greater than the sum of its parts. We will be committed shareholders of Golden Telecom, Inc. and will take an active role on its board of directors."

Alexander Vinogradov, Chief Executive Officer and President of Golden Telecom, Inc. commented: "We are delighted to have reached an agreement to acquire such excellent companies. By combining the resources of Golden Telecom, Inc. and Comincom-Combellga, Golden Telecom, Inc. will become a distinct leader in the market for voice and broadband services for business customers in Russia and the CIS."

For further information:


Dag Melgaard, Chief Press Spokesman, tel: (+47) 901 92 000

Golden Telecom, Inc

Anna Chin Ga Pin, Public Relations, tel.: (+7) 501 797 9300

Tom Adshead, Investor Relations, tel.: (+7) 501 797 9300