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FOR IMMEDIATE RELEASE
GLOBAL TELESYSTEMS CLOSES SALE OF GOLDEN TELECOM SHARES
Purchasers acquire option to purchase GTS's remaining interest
LONDON - 14 MAY 2001 - Global TeleSystems, Inc. ("GTS") (NYSE: GTS; Easdaq:
GTSG; Frankfurt: GTS) today announced that it has closed, through a subsidiary,
the sale of most of the equity it owns in Golden Telecom, Inc. ("Golden
Telecom") (NASDAQ: GLDN) for $125 million. Seventy million dollars was received
in cash at closing, with the remaining $55 million to be paid at the end of this
month. The purchasers include Alfa Telecom Limited ("Alfa"), an affiliate of
Alfa Bank, which is one of Russia's largest private banks; and two current
investors in Golden Telecom: Capital International Global Emerging Markets
Private Equity Fund, L.P. ("Capital"); and a group of funds advised by Baring
Vostock Capital Partners ("BVCP"). Golden Telecom provides a broad range of
telecommunication services to businesses, telecommunication providers and
consumers across Russia and in the Commonwealth of Independent States.
After this sale, GTS owns approximately 11.6% of Golden Telecom's shares; Alfa
owns approximately 43.6% of Golden Telecom's shares; the BVCP advisory funds
owns approximately 7.6% of Golden's shares; and Capital owns approximately 8.8%
of Golden's shares. The purchasers also have acquired an option, exercisable
over the next 60 days, to purchase from GTS up to an additional $25 million of
Golden Telecom shares at a price of $11.00 per share, and, if certain conditions
are met, the option to purchase GTS's remaining interest in Golden Telecom over
the next twelve months for the greater of $11.00 price per share or a 20%
premium to the average closing share price for the 60-day period preceding the
purchase date.
The sale of GTS's interest in Golden Telecom is part of an overall restructuring
of GTS that was announced on 13 November 2000, which includes the sale of
non-strategic assets. The objective of the restructuring is for GTS to emerge as
a well-financed, 100% data-focused company, operating under the "Ebone" brand.
Ebone is the leading European provider of broadband optical and IP services to
carriers, service providers and European enterprises.
GTS will be hosting analyst conferences in New York on Tuesday, 22 May 2001 and
in London on Wednesday, 30 May 2001. At the conference, GTS management will
provide details on the status of the company's restructuring program and the
strategy and positioning for Ebone. For further information concerning the
conference please contact investor.relations@gts.com or the investor contacts
listed below.
ABOUT GTS (www.gts.com)
GTS is the parent company of Ebone, the original and most experienced data-only
broadband optical and IP networking company in Europe. Its fibre network extends
more than 21,000 kilometers, reaching virtually all major European cities. The
Ebone network is Europe's leading broadband IP network, serving 25% of all
Internet users and the first IP network to operate at 10 Gbps. The network will
be directly connected to North America via Ebone's own trans-Atlantic fibre
pair, which will be initially provisioned with 80 Gbps of capacity and is
expected to be operational in the first half of 2001.
With operations in North America and in 50 European cities, Ebone delivers
tailored networking services to telecommunication carriers, Internet service
providers, Internet-centric and multinational corporations. Ebone serves over
150 of the leading telecommunication and data customers in Europe and the North
America. The company is the original independent pan-European broadband network
service provider, making Ebone Europe's most experienced broadband provider.
-- more --
ABOUT ALFA GROUP (www.alfa-bank.com, www.alfabank.ru)
Alfa Group Consortium is a major, privately-owned Russian financial and
industrial group with interests ranging from oil and insurance to real estate
and supermarkets. Alfa Bank is one of its core holdings and the largest
privately owned bank in Russia with branches across nine time zones in Russia,
Ukraine, and Kazakstan, as
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GTS sells interest in Golden Telecom
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well as subsidiaries in London and Amsterdam. Alfa Bank is active in commercial
and investment banking, asset management and insurance as of December 2000 had
total assets of approximately $1.5 billion and capital of more than $150
million. Since its founding in 1990 Alfa Bank has successfully invested in over
30 companies. Alfa Bank CEO Alex Knaster is a former President and CEO of Credit
Suisse First Boston, Moscow, and a Harvard MBA.
ABOUT BARING VOSTOK CAPITAL PARTNERS (www.bvcp.ru) AND BARING PRIVATE EQUITY
PARTNERS (WWW.BPEP.COM)
Baring Vostok Capital Partners is a private equity firm with offices in Moscow
and Kiev. Currently, Baring Vostok manages 3 investment funds with total capital
in excess of 300 million USD. Baring Vostok is a subsidiary of Baring Private
Equity Partners ("BPEP") a global private equity firm with approximately 2.0
billion USD of funds under management and 21 offices in 17 countries worldwide.
BPEP is a business unit of ING Asset Management. ING Group is a global financial
institution that is active in the field of banking insurance and asset
management in more than 60 countries with over 100,000 employees.
ABOUT CAPITAL INTERNATIONAL GLOBAL EMERGING MARKETS PRIVATE EQUITY FUND, L.P.
(www.capgroup.com)
Capital International Global Emerging Markets Private Equity Fund, L.P. is a 600
million USD private equity fund managed by Capital International, Inc. ("CII").
CII, a subsidiary of The Capital Group Companies Inc., is one of the largest and
most experienced emerging markets investment managers in the world with over 23
billion USD of emerging markets assets under management.
ABOUT GOLDEN TELECOM (www.goldentelecom.ru)
Golden Telecom, Inc., NASDAQ "GLDN" is a leading facilities-based provider of
integrated telecommunications and Internet services in major population centers
throughout Russia and other countries of the Commonwealth of Independent States
(CIS). The company offers competitive local exchange carrier services using its
overlay network in Moscow, Kiev and Saint Petersburg; data and long-distance
services using a fiber optic and satellite-based network - including more than
135 combined access points in Russia and other countries of the CIS; dedicated
and dial-up Internet access to businesses and consumers; Internet content
through numerous web brands powered by its Russia-On-Line portal; and mobile
services.
GTS AND EBONE CONTACTS
INVESTORS
Jim Shields, Vice President Investor Relations and Corporate Treasurer
Tel: +44 (0) 207 769 8264; fax: +44 (0) 207 769 8068;
e-mail: jim.shields@gts.com
Patti Kelly, Senior Manager, Investor Relations
Tel: +1 703 258 3470; fax: +1 703 258 3402; e-mail: patti.kelly@gts.com
MEDIA
Glenn Manoff, Vice President, Communications
Tel: +44 (0) 207 769 8290; fax +44 (0) 207 769 8084; email: glenn.manoff@gts.com
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainties. Although GTS
believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this press release will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by GTS or any other person that the objectives and plans of GTS,
as applicable, will be achieved.
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