Russian group buys KPNQwest Central Europe

8 August 2002 -- The Antel Holding Ltd subsidiary of Russian investment Group Menatep is to buy the assets of KPNQwest Ebone Central Europe BV for EUR36.5m in equity.

8 August 2002 -- The trustees of bankrupt Amsterdam-based data services provider KPNQwest say that the Antel Holding Ltd subsidiary of Russian investment Group Menatep has agreed to buy the assets of KPNQwest Central Europe BV (formerly GTS Central Europe Holdings BV) from a banking syndicate led by Citigroup for EUR36.5m in equity, subject to an audit by Ernst & Young.

Group Menatep is an international diversified holding company that controls assets of over USD20bn, including Russia's number 2 oil producer YUKOS. Antel will assume the operational debt of KPNQwest in central Europe, said by director Alexander Kabanovsky to be in the "single-digit millions" of Euros.

Before its bankruptcy at the end of May, KPNQwest had hoped to sell the central European network for cash, with a group led by Lehman Brothers as the most likely buyer, but it was unable to complete the deal.

KPNQwest Central Europe BV is the largest alternative telecom operator in Central Europe, with 31,000 customers and revenues of EUR133m in 2001. It owns and operates five alternative carriers in the Czech Republic, Poland, Hungary, Romania and Slovakia, providing telecoms services to large corporations, medium and small businesses as well as residential clients.

The companies focus on the provision of bundled services (voice, data and IP) and building broadband local services on a demand-driven basis under the "GTS" brand name in the Czech Republic, Hungary, Romania and Slovakia and under the "Internet Partners" brand name in Poland.

"The purchase will expand the scope of Antel Holdings Ltd's operations, by giving it a strong entry point into Central Europe's most dynamic and developed telecoms markets," said Kabanovsky. "The companies of KPNQwest Central Europe BV complement Antel Holdings' current operating companies in the US and the Russian Federation and target the same core customer base of large corporate clients and medium and small businesses." Antel Holdings is also exploring possible strategic partnership opportunities.

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