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Russia's Teleset Networks Fund Raising Scheme

Teleset Networks, a private fixed-line telecom network operator in the Republic of Tatarstan, Russia, announced that, in accordance with its stated strategy, it is developing successfully through a combination of organic growth and strategic acquisitions of complementary telecom operators.

At a meeting held on Feb. 5, 2008, the Board of Directors reviewed the progress achieved so far in implementing its stated strategy and the Company's future funding requirements.

During the first half of 2007, the Company successfully completed the integration of TNPKO, its first acquisition which strengthened Teleset's position in Kazan. In November 2007, it made its first strategic move outside Kazan with the US$10.8 million acquisition of OOO Svyazinvest, a private fixed-line telecom operator in Naberezhnye Chelny, the second largest city in Tatarstan.

The Company is actively looking at acquiring other companies with a total subscriber base in the region of 30-40 thousand lines. The Board of Directors recognises that, in order to be able to fully capitalise on acquisition opportunities in the Russian market, the Company has to have funds in place before starting negotiations. These funds together with other funds the Company has available will be used to finance possible acquisitions.

In view of the acquisition opportunities identified, the Board of Directors has decided to seek approval from shareholders to raise new equity as soon as possible and to provide the flexibility to raise further capital, as required, in the future.

Following indications of support from shareholders, the Board of Directors has decided to seek to raise GBP5 million (US$10 million) via an offer to shareholders, on a pro-rata basis, of 20 million new shares at 25 pence each.

In addition, the Board of Directors also proposes that the pre-emption rights of shareholders be disapplied for the issue and allotment for cash of a further 30 million new shares.

At the same time, following the entry of Cyprus into the Eurozone, it is now necessary to convert the Company's share capital from Cyprus Pounds into Euros.

These proposals will be considered at an Extraordinary General Meeting to be held on Mar. 26, 2008. The Notice of EGM detailing the resolutions has been sent to shareholders.

Philippos Vatiliotis, Non-executive Chairman, commented:"Teleset has established a strong record of profitable growth and managing acquisitions. The company is entering an exciting phase in its development and is well placed to take advantage of strategic opportunities in its chosen markets. We are well supported by our institutional investors and the Board is unanimous in recommending the proposals to shareholders."

Source:
http://www.totaltele.com/View.aspx?ID=9440&t=1

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