Today JSC COMSTAR - United Telesystems (Comstar UTS, LSE: CMST), the leading provider of integrated telecommunications services in Russia and the CIS, which is controlled by AFK SISTEMA (LSE:SSA), and INTRACOM HOLDINGS (ASE:INTRK) announced that they have reached an agreement for Comstar to subscribe to a 51% stake in Hellas On Line SA (HoL) for a cash consideration of €47.9 million. The closing of the transaction is subject to regulatory approvals, which the parties expect to obtain during the first quarter of 2007.
Comstar UTS is one of Russia's leading telecom operators which provides a wide spectrum of services ranging from voice and data transmission to broadband Internet access, CATV, call centers and VPN services. Comstar's consolidated revenues for 2005 reached $ 908 million. Comstar UTS offers voice, data and Internet, pay-TV and various value-added services to corporate, operator and residential subscribers, using its alternative and traditional fixed-line networks.
Founded in 1993, Hellas On Line (HoL), is the first Internet service provider in Greece, and has been a member of the INTRACOM HOLDINGS Group since January 2006. HOL is one of the largest alternative fixed-line operators in Greece and the third largest broadband provider with approximately 12% market share. HoL provides ADSL and dial up services to consumers, as well as VOIP, VPN and hosting services to corporate clients. The company has already deployed more than 90km of its own fiber optic network in Athens, and plans to further extend its infrastructure across the capital as well as other large cities. HOL's residential client base includes approximately 35,000 broadband and 70,000 dial-up subscribers. In addition, HoL provides services to approximately 1,850 corporate customers. The company's revenues in 2005 amounted to € 25.6 million, 40% of which were derived from services to residential customers.
Eric Franke, Chief Executive Officer of Comstar - United TeleSystems, commented: "We are very pleased to announce this deal and have high hopes for this project, taking into account the benefits of the partnership with such a strong regional player as INTRACOM HOLDINGS, and the positive conditions in the Greek market. The fixed-line market and broadband segment have significant growth potential in Greece. The acquisition of Hellas on Line will allow us to create a basis for the development of broadband services in the market, which is characterized by the lowest penetration in Europe. Due to the similarity of HoL's business model to our own, we are planning to integrate HoL into Comstar-UTS's structure and rebrand its services and product offerings to increase its operating efficiency."
Mr. Stefanos Loukakos, Managing Director of Hellas On Line stated: "This agreement will further strengthen our firm position in the Greek telecom market. HoL will be better positioned to attain its strategic goals, such as invest in infrastructure projects, increase its market share and enhance its innovative broadband offerings, becoming, thus, the leading broadband operator in Greece. Moreover, the presence of a valuable strategic partner in our share capital will allow us to expand our activities in the wider region of Southeastern Europe and the Middle East."
SISTEMA is the largest private sector consumer services company in Russia and the CIS, with over 50 million customers. SISTEMA portfolio includes market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported in 2005 revenues of US$ 7.6 billion and total assets of US$ 14 billion. SISTEMA's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "SIST" on the Moscow Stock Exchange (MSE).
Comstar UTS is a leading provider of integrated communications services in Moscow and the Moscow region in terms of revenues and subscribers and also offers communications services in other regions of Russia and the Commonwealth of Independent States. Comstar UTS had 3.6 million subscribers in its traditional segment of the business, 477.3 thousand subscribers in its alternative segment in Moscow and 92.2 thousand subscriber in its alternative segment in the regions at September 30, 2006. Comstar UTS of fers voice, data and Internet, pay-TV and various value-added services to corporate, operator and residential subscribers, using its alternative and traditional fixed-line networks. Comstar UTS had consolidated operating revenues of US$ 286.6 million for the second quarter of 2006 and Comstar UTS' consolidated assets totalled US$ 2.7 billion at June 30, 2006. Comstar UTS ordinary shares are listed on the Moscow Stock Exchange and on the London Stock Exchange under the symbol "CMST".
Founded in 1977, INTRACOM SA is listed on the Athens Stock Exchange since 1990 and included in the FTSE/ASE-40 index. In December 2005 INTRACOM was transformed to a holding company under the name INTRACOM HOLDINGS, being one of the largest multinational technology groups in South-Eastern Europe. The Group's major participations are: INTRACOM TELECOM (telecommunication systems and solutions), INTRACOM DEFENSE ELECTRONICS (defense electronics systems), INTRACOM IT SERVICES (IT solutions for the public sector, banking and enterprises), INTRAKAT (construction, high-tech installations, steel structures, infrastructure maintenance) and Hellas On Line (Internet and voice services provider). INTRACOM HOLDINGS, as a group, has 5,700 employees, exports to 60 countries and operates subsidiaries in 19 countries.
For more information please visit: www.intracom.com.