India's Reliance Group completes its acquisition of FLAG Telecom

13 January 2004 London and Mumbai, India Lightwave--FLAG Telecom, a provider of international wholesale network transport and communications services, today announced that the company has completed its consolidation with Reliance Gateway.

Jan 13th, 2004

13 January 2004 London and Mumbai, India Lightwave--FLAG Telecom, a provider of international wholesale network transport and communications services, today announced that the company has completed its consolidation with Reliance Gateway. At the special shareholders meeting held in New York today, 88.8% of company's shareholders were represented, and all of the votes cast were unanimously in favour of the proposal to consolidate. With this positive vote, all conditions for the closing of the merger were satisfied allowing the amalgamation to become effective immediately following the meeting.

Speaking after today's meeting, Patrick Gallagher, co-chairman and chief executive of FLAG Telecom, said: "The outcome of today's vote is highly significant for both companies. For Reliance, it marks a major step towards its vision of establishing the Reliance Group of companies as a world-class global telecommunications player. For FLAG, it brings a strong base for future growth and opportunities to drive forward its strategy while contributing to the Reliance Group vision.

"FLAG brings both a unique global network footprint and a wealth of international experience, while Reliance already provides a state of the art telecommunications backbone throughout India. As a Reliance company we will continue to deliver customer value through the leverage of our existing network, supported by focused strategic investments that maintain our competitive advantage."

Amit Khanna, Reliance Infocomm, said: "FLAG's global fiber-optic network will complement our existing next generation digital network in India and enable us to serve our customers worldwide more effectively by offering end-to-end solutions. FLAG has an excellent reputation in the international marketplace and will retain its own brand identity going forward. FLAG's people have shown unwavering professionalism and enthusiasm. By sharing the best practices, processes and experience between the Reliance Group of companies we will become the carrier of choice for all international, as well as domestic, services."

Advisors to Reliance on this transaction are Davis Polk & Wardwell, legal advisors and Deutsche Bank, financial advisors. Advisors to FLAG Telecom are Akin Gump Strauss Hauer & Feld LLP, legal counsel and Houlihan Lokey Howard & Zukin (Europe) Limited, financial advisors.

Reliance Infocomm Ltd.,.India's largest mobile service provider, is a part of the Reliance group founded by Shri Dhirubhai H. Ambani (1932-2002). Reliance Infocomm has established a pan-India, high-capacity, integrated (wireless and wireline) and convergent (voice, data and video) digital network, to offer services spanning the entire Infocomm value chain - infrastructure, services for enterprises and individuals, applications and consulting. The Reliance Group is India's largest business house with total revenues in the financial year ended March 2003 of Rs 800 billion (US$ 16.8 billion), cash profit of over Rs 98 billion (US$ 2.1 billion), net profit of over Rs 47 billion (US$ 990 million), market capitalisation Rs 974 billion (US$21.7 billion) and exports of Rs 119 billion (US$ 2.5 billion).

FLAG Telecom has an established customer base of more than 180 leading operators, including all of the top ten international carriers. FLAG owns and manages an extensive optical-fiber network spanning four continents and connecting key business markets in Asia, Europe, the Middle East and the USA. FLAG also owns and operates a low latency global MPLS based IP network, which connects most of the world's principal international Internet exchanges. FLAG offers a focused range of global products, including global bandwidth, IP, Internet, Ethernet and co-location services.

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