AS EESTI TELEKOM              STOCK EXCHANGE ANNOUNCMENT                17.05.2005

 

Eesti Telekom subsidiary purchases IT-provider MicroLink

 

Elion Enterprises Ltd, a  wholly  owned  subsidiary  of  AS  Eesti  Telekom,  will

purchase 95 per cent of  the  shares  of  MicroLink  AS,  the  leading  Baltic  IT

services company. MicroLink  Estonia  AS  will  continue  independently  in  Elion

group, MicroLink  operations  in  Latvia  will  be  sold  to  Lattelekom  SIA  and

MicroLink operations in Lithuania to  Lietuvos  Telekomas  AB.  Elion  Enterprises

intends to present a takeover bid to minority shareholders for acquiring  rest  of

the shares with same conditions.



The aim of the acquisition  of  MicroLink  Estonia  is  to  reinforce  the  market

position of Elion and MicroLink in the Estonian IT market and to  offer  customers

the  broadest  selection  of  IT  services  and  integrated  IT  &  communications

solutions. Elion IT-services business area  will  be  moved  to  MicroLink,  while

MicroLink Internet  and  data  communications  business  will  be  run  by  Elion.

MicroLink will be responsible for offering IT services, Elion´s role  is  to  sell

IT solutions and integrated solutions to SME sector as well as to manage  customer

care of corporate clients.



Transition of the shares will take place after approval of the  Estonian,  Latvian

and  Lithuanian  Competition  Boards.  According   to   Tallinn   Stock   Exchange

regulations this transactions is not considered as a significant  acquisition  and

due to that parties have agreed not to disclose  exact  price  of  the  deal.  The

value of the MicroLink Estonia is less than 100  million  kroons  (less  than  6.4

million euros) for Elion. This transaction cannot be considered as  a  transaction

with a related party as no member of the Council nor of the  Management  Board  of

Elion Enterprises Ltd.  or  Eesti  Telekom  have  any  personal  interest  in  the

transaction.

 

MicroLink (www.microlink.com) is the largest  Baltic  IT  services  company  whose

business interests  include:  system  integration  and  infrastructure  solutions;

software  development;  ERP  and  business  solutions;  data  communications   and

networking; central systems  and  datacentre  solutions;  systems  management  and

maintenance; end-user PC services and support; full IT outsourcing. The group  has

553 employees and is present in all three Baltic countries. MicroLink's  2003/2004

financial year net revenue was 52.4 million euros  and  net  profit  22.4  million

euros. MicroLink  is  the  only  Baltic  IT  company,  whose  business  areas  and

technology solutions cover more than 90% of IT needs of modern private and  public

organizations.



Elion  (www.elion.ee)  is  the  largest  telecommunications  and  IT  provider  in

Estonia. It is owned by AS  Eesti  Telekom,  listed  at  the  stock  exchanges  of

Tallinn and London (TSE:ETL/LSE:EETD). Elion provides comprehensive household  and

business communication services - from  telephone  calls  to  integrated  business

solutions, from the sale of handsets and computers to the provision of  broadband,

the installation and maintenance of large IT systems.  In  Estonia  Elion  is  the

market  leader  in  fixed  network  calls,  in  Internet  subscriptions  and  data

communication solutions, and it has made a powerful entry into the IT  market.  In

2004 the consolidated net sales of the Elion Group were 2.679 billion kroons  (171

million Euros), and the consolidated  net  profit  was   342  million  kroons  (22

million Euros). Currently the Elion Group employs a staff of 1473.





Hille Võrk

CFO

+372 6272460