Golden Telecom purchases 50% stake in Sovintel

Golden Telecom Inc. announced today the completion of a deal that resultedin the company's acquisition of a 50 percent stake in Sovintel fromRostelecom, a Russian international and domestic long distancetelecommunications operator. As the press service of Golden Telecom Inc.reported, the company will pay $56m and transfer around 4m of its shares toRostelecom, which is equal to 15 percent of the total number of thecompany's outstanding shares. After the transaction, Golden Telecom Inc.will have the opportunity to consolidate Sovintel's financial results inits own reports, while Rostelecom will become a shareholder of GoldenTelecom Inc. and obtain membership in the company's Board of Directors. Theconsolidated revenues of Golden Telecom and Sovintel will exceed $280m,while the companies' consolidated EBITDA will amount to around $90m in2002. The advantages of consolidated financial reports will turn a profitas early as in 2002. The company expects it to grow in 2003, too. Alfa-Bankand LV Finance acted as consultants of Golden Telecom's transaction, whileRostelecom's consultant was Gamma Group. .

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