Share subscription agreement with Linx Telecommunications
Current report 24/2007 dated 11.05.2007
As previously announced (current report no. 13/2007 dated February 26, 2007), on May 10, 2006, ATM S.A. and Linx Telecommunications B.V. having its registered office in Amsterdam, signed a Subscription Agreement. The agreement provides that Linx Telecommunications shall issue new shares which shall be taken up by ATM. . The shares in question shall be taken up for a total amount of EUR 16.5 million, and shall be paid for by ATM in cash.
The Subscription Agreement concluded is of a conditional nature, contingent upon the ATM’s planned share issue, and obtaining funds for financing the deal. As per the agreement, the shares should be taken up not later than on August 31, 2007.
The investment in Linx Telecommunications planned by the Issuer is of a strategic nature, and involves the commitment of ATM S.A. to the establishment of a regional telecommunications operator specialized in warehouse data transmission services, and providing telecommunication-related services. The agreement signed provides for further capital involvement of ATM, and a possibility of taking hold of a majority shareholding in Linx Telecommunications over 3 years.
Linx Telecommunications is one of the most dynamic independent telecommunications operators operating in Central and Eastern Europe. It started its activity in 2003, and by doubling its revenues every year, it plans to generate sales of 20 million Euros in 2007, EBITDA approx. 2 million Euros, and the net result at around zero. A fast growth in financial results is also foreseen in the forthcoming years.
Linx Telecommunications offers high quality warehouse data transmission services to international and domestic telecommunications operators, Internet service suppliers, and corporate clients. The company specializes in providing telecommunications lines between Russia, Estonia, Lithuania, Ukraine, Poland, and Scandinavia, Western Europe and the U.S.A. The company provides telecommunications services based on its own and leased infrastructure. Linx Telecommunications owns 600 km of fiber optic cable on the bottom of the Baltic Sea, connecting Stockholm, Helsinki, and Tallin. The company also offers co-location and hosting services in its modern co-location centers in Moscow and Tallin. More information is available on the website at www.linxtelecom.com.
The capital cooperation between Linx Telecommunications and ATM will allow for joining competences in the field of telecommunication, and will create opportunities to extend the portfolio of services offered to clients and to generate significant revenue synergies. ATM intends to use the position and contacts of Linx Telecommunications in fast developing markets of Eastern Europe, such as Russia, Ukraine, and the Baltic States for offering a complete portfolio of its services relating to telecommunication.
The Issuer’s Management Board also inform that:
- there are no ties between the Issuer, including persons managing or supervising the Issuer and the company Linx Telecommunications,
- the shares being acquired were considered high-value assets as their value exceeds 10% of the Issuer’s equity value,
- the share acquisition shall be financed using funds obtained from the Issuer’s share issue,
- the shares being acquired are 22% of the Linx Telecommunications initial capital, their nominal value is EUR 27,500, they are of a long-term capital deposit nature, and as a result of their acquisition the Issuer shall receive 22% of the number of votes at the General Meeting of Shareholders.
Roman Szwed — President of the Management Board,
Tadeusz Czichon — Vice-President of the Management Board