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The Government of the Republic of Serbia

In the service of citizens

Telekom Srbija again completely domestically-owned

Belgrade, 26 January 2012

Prime Minister Mirko Cvetkovic and President Boris Tadic attended the signing of the contract on the transfer of Telekom Srbija shares from Greek OTE, under which the Serbian telecommunication company will again be 100% locally-owned.

From left: Boris Tadic, Mirko Cvetkovic, Michalis Tzamaz and Branko Radujko

The contract on the acquisition of 20% stake from OTE was signed by directors of Greek OTE and Telekom Srbija, Michael Tsamaz and Branko Radujko.

The Greek operator has sold its 20% stake in Telekom back to the company for the sale price of €380 million, and the shares were today transferred in the central registry, with 80% of the Telekom shares in the ownership of the state and 20% belonging to the company itself.

Cvetkovic expressed satisfaction over the signing of this agreement, adding that all participants in this business will benefit from this.

He pointed out that this transaction now allows Telekom Srbija to appear on the stock market, while for Serbia it is important as there will no longer be shares with priority rights.

Also the citizens will benefit as they will get free shares, said the Prime Minister.

This is favourable for OTE as well because in a situation when Greece is experiencing financial difficulties, the company will receive a considerable amount of ready cash to help it realise its current goals. Cvetkovic thanked the Greek partners for their cooperation so far, adding that their presence in Telekom Srbija had helped the company to achieve positive results. Tadic stressed that the government made a difficult but good decision to reject unacceptable offers for Telekom’s privatisation, followed by a decision to purchase company shares, thus creating the conditions for the Serbian management to run the company and secure free shares for citizens. Radujko noted that the purchasing price of OTE’s shares in Telekom is favourable bearing in mind the situation in the telecommunications market, stressing that the transaction will not cost tax payers or the budget anything because the loan approved for the purchase of Telekom’s shares will be repaid within the deadline of three years from its own funds.

Of the €380 million paid for the purchase of 20% of shares, €320 million has been secured from a banking loan and €60 million from company funds, he explained.

Tsamaz said that this agreement will be beneficial for both companies, as well as the entire Serbian economy, voicing his gratitude to the Serbian president and Prime Minister for their contribution to closing this deal. Cooperation in the past years was very productive because our common goal was to keep Telekom healthy and turn it into a modern company providing the latest services, Tsamaz concluded.