Telekom Takes Control of Polish Network

Deutsche Telekom, Vivendi Universal, Elektrim and Ymer Finance have finally reached an agreement in principle on Deutsche Telekom's offer to increase its shareholding in the Polish GSM network operator, Polska Telefonya Cyfrowa (PTC) from 49% to 100% for a revised total cash offer of US$1.24 billion. All the parties have agreed to make their best efforts, in good faith, to reach a definitive agreement not later than September 19, 2003.

The purchase price will be allocated among the shareholders of Elektrim Telekomunikacja as follows: Vivendi Universal US$781 million, Elektrim US$452 million and US$10 million for Ymer. Payment of the proceeds by Deutsche Telekom will be made upon closing which should occur during the first week of January 2004.

Raising its stake in PTC to 100% means Deutsche Telekom will be able to fully consolidate PTC from 2004. The Polish mobile network operator is profitable both before and after taxes. In 2002, with revenue of around US$1.5 billion, PTC achieved EBITDA of US$604 million and generated profit after taxes of around US$102 million.

Deutsche Telekom's debt reduction targets remain unchanged."

Posted to the site on 16th September 2003