Atnaujinta: 2024.07.21 01:09 (GMT+3)
Eesti Telekom FINANCIAL RESULTS 07/15/2004 09:00
COMMENTS ON FINANCIAL RESULTS, EEK
15 July 2004
THE FINANCIAL RESULTS OF THE FIRST SIX MONTHS OF 2004
Eesti Telekom, the leading provider of telecommunication
services in Estonia, hereby announces its results for the
six-month period, which ended 30 June 2004.
Financial highlights
Q2 Q2 Change HY1 HY1 Change
2004 % 2004 %
200 200
3 3
Total revenues, 1,288 1,188 8 2,506 2,295 9
mEEK
EBITDA, mEEK 552 563 -2 1,073 1,103 -3
EBITDA margin, % 43 47 43 48
EBIT, mEEK 347 341 2 657 653 1
EBIT margin, % 27 29 26 28
Profit before 357 410 -13 676 729 -7
taxes, mEEK
Net profit for the -26 404 294 443 -34
period, mEEK
EPS, EEK -0.19 2.94 2.13 3.22 -34
CAPEX, mEEK 84 85 -1 191 128 49
Net gearing, % -33 -33 -33 -33
ROA (annualised), -2 36 13 20
%
ROE (annualised), 37 44 34 38
%
Commenting on these financial results, Chairman Jaan Männik
stresses:
"The strong sales growth and maintained profitability
continued in the second quarter."
For further information, please contact:
Krister Björkqvist +372 6272 465
CFO
Hille Võrk +372 6272 460
Financial Manager
CHAIRMAN’S STATEMENT
Financial results
The development of the telecommunications market in Estonia,
during the first six months of 2004, has been energetic. The
mobile communications sector has been the "engine" of this
development. Mobile penetration in Estonia reached 77% by
the end of 2003. This was a very good indicator, considering
the nation’s economic opportunities. In the course of six
months, mobile penetration has reached 84%. Lower tariffs
are largely responsible for this increase in customers, but
it has not been the only factor. In addition to voice
communications, data communications are gaining popularity
in both the mobile and fixed communications spheres.
Competition in the Estonian telecommunications market is
strong, and several operators have been successful in their
endeavours. As a result, the flow of capital in this market
has also been increased by the rapid growth of
interconnection transactions.
The Eesti Telekom Group has been able to keep up with market
developments, and the second quarter was successful for us.
The consolidated revenues of the Group were up by 8%,
compared to the second quarter of 2003, amounting to 1,288
mln EEK. All of the spheres of activity, that the Group is
involved in, contributed to this increase. The revenue
increase was accompanied by an increase of expenses. The
consolidated operating expenses of the second quarter of
2004 exceeded the corresponding figure for 2003 by 18%,
amounting to 736 mln EEK. Various circumstances lead to this
increase of expenses. Due to the increase in interconnected
calls, the Group has had to make greater interconnection
payments. We have set as our goal the maintaining of our
market position. The achieving of this goal has required the
increasing of our marketing expenses. The expansion of our
activities in the construction and the wholesale and retail
trade sectors has been accompanied by an increase of the
expenses connected with these sectors.
The EBITDA of the Group, in the second quarter of 2004, was
552 mln EEK, and the EBITDA margin was 43%. The margin is
down, compared to the same period in 2003. However, it has
been possible to maintain the margin established in the
first quarter of 2004.
The depreciation of the Eesti Telekom Group, in the second
quarter of 2004, was down by 7%, compared to the same period
in 2003. Depreciation has been falling during the last
quarters as a result of the relatively low CAPEX that the
Group has had during the past years. However, it should be
noted, that, in the course of the last few quarters, several
extensive investment projects have been carried out in the
mobile sector.
The EBIT of the Eesti Telekom Group in the second quarter of
2004 was 347 mln EEK, up by 2%. The Group’s pre-tax profit
amounted to 357 mln EEK, down by 13%. This decline is the
result of the fact that the financial revenues of the base
period include a 60 mln EEK capital gain from the sale of
49% of the shares of AS Connecto.
The second quarter of 2004 ended for the Eesti Telekom Group
with a net loss of 26 mln EEK. Dividend income tax expense,
calculated on dividends paid to AS Eesti Telekom by its
subsidiaries, and paid by AS Eesti Telekom to its
shareholders, in the amount of 383 mln EEK, was shown as an
expense of the second quarter. In the year 2003, dividend
income tax calculated for dividends paid by subsidiaries to
AS Eesti Telekom, was already shown as an expense of the
first quarter. As a result of the increase in dividends paid
out in 2004, as compared to 2003, the dividend tax of the
Eesti Telekom Group increased by 97 mln EEK.
At the end of June 2004, the total assets of the Eesti
Telekom Group amounted to 4,264 mln EEK (in December 2003,
4,599 mln EEK). Non-current assets were reduced, from the
beginning of the year, by 198 mln EEK. Current assets were
down by 137 mln EEK. This decline was mainly the result of
the lower balance of cash and cash equivalents by 226 mln
EEK related to the dividend payout. At the end of June 2004,
the Group’s non-current debt amounted to 2 mln EEK, and
current debt amounted to 31 mln EEK (in December 2003, 4 mln
EEK and 8 mln EEK respectively). By the end of the period,
the net debt of the Group amounted to -1,091 mln EEK, and
net gearing was -33%. Other current liabilities of the Group
were up by 424 mln EEK, including a 452 mln EEK increase in
tax liabilities. The majority of the increase in tax
liabilities was income tax calculated on dividends paid out.
The net operating cash flow of the Eesti Telekom Group in
the first six months of 2004 was 997 mln EEK (during the
corresponding 6 months of 2003, 1,063 mln EEK). Cash flow
into investments was essentially larger than a year ago -
3 mln EEK in 2003 (taking into account the 68 mln EEK, which
came in from sales of the minority ownership in AS
Connecto), -146 mln EEK in 2004. The cash outflow into
financing was 1,077 mln EEK, including 1,101 mln EEK paid as
dividends (during the corresponding 6 months of 2003, 818
mln EEK, including 824 mln EEK paid as dividends).
Elion Group
Q2 Q2 Chang HY1 HY Chang
2004 e % 2004 1 e %
200 20
3 03
Total revenues, mEEK 666 632 5 1,318 1,237 7
EBITDA, mEEK 211 230 -8 436 461 -5
EBITDA margin, % 32 36 33 37
EBIT, mEEK 93 94 -1 192 186 3
EBIT margin, % 14 15 15 15
Profit before taxes, 96 154 -38 197 245 -20
mEEK
Net profit for the -5 156 96 178 -46
period, mEEK
CAPEX, mEEK 42 43 -2 94 62 52
ROA, % -1 30 9 16
ROE, % 5 38 22 29
The revenue growth of the Elion Group continued in the
second quarter of 2004, when the result of the second
quarter of 2003 was exceeded by 34 mln EEK. The operating
expenses were up by 52 mln EEK or 13%, amounting to 455 mln
EEK. The EBITDA of the second quarter was 211 mln EEK, down
by 19 mln EEK, compared to the second quarter of 2003.
Depreciation of the Elion Group is continuously down, as a
result of the relatively low CAPEX that the Group has had
during the past years. Depreciation of the second quarter
amounted to 118 mln EEK, down by 17 mln EEK, compared to the
same period in the previous year. The EBIT of the Elion
Group was 93 mln EEK, down by 1 mln EEK. The net loss for
the second quarter was 5 mln EEK. This result cannot
properly be compared with the corresponding period of 2003
for two reasons. First, the net profit of the second quarter
of 2003 included a 60 mln EEK capital gain from the sale of
49% of the shares of AS Connecto. Second, there is the
dividend tax expense (101 mln EEK) shown as an expense of
the second quarter in the 2004 accounts, while in 2003, the
dividend tax was already shown as an expense of the first
quarter.
The consolidated revenues growth of the Elion Group resulted
from growth of the parent company of the Group as well as
from growth of the subsidiary companies. Revenues of Elion
Enterprises AS, the parent company of the Elion Group, were
up by 2%, amounting to 577 mln EEK. These revenues were
mostly influenced by a price war between the mobile
communication operators and by increasing competition in the
Internet market.
In April 2004, Radiolinja Eesti, the last Estonian mobile
operator to do so, launched its prepaid call-card. As part
of the promotion campaign, the call-card clients can, until
September, call fellow clients for free. Other mobile
operators reacted to the campaign by lowering tariffs,
thereby reducing the price differences between calls made
from fixed and mobile phones. The mobile operators’ price
war has had an effect on the results of fixed phone
communications by reducing domestic call minutes and
revenues. Compared to the second quarter of 2003, this
year’s revenues from domestic calls were 20% lower.
In the second quarter, Elion Enterprises AS reduced several
international tariffs. Customers now have the opportunity to
choose not just one, but two Friend Countries, which they
can call at lower rates than usual. Elion’s merchandising
coupled with Estonians’ ever increasing activities abroad
have ensured the increase of revenues from international
calls. The results of this year’s second quarter surpassed
the indicator for 2003 by 9%.
The revenues from fixed to mobile calls were down by 6% in
the second quarter. However, the quantity of call minutes
has remained stable, so that the reduction of revenues is
caused more by the very good results of the corresponding
period in 2003, rather than by this year’s poorer results.
Elion Enterprises AS estimates its share of total call
minutes initiated from the fixed network to continuously be
87% (June 2003: 87%). The market share of domestic call
minutes, international call minutes, fixed to mobile call
minutes, and dial-up minutes is 87% (June 2003: 87%), 68%
(June 2003: 66%), 75% (June 2003: 74%), and 96% (June 2003:
95%), respectively.
The revenues from installation and monthly fees were down by
4%. By the end of June 2004, Elion was using 431,937 main
lines (a penetration of 31.9 lines per 100 persons). Since
the beginning of the year, the number of main lines has
decreased by 12.8 thousand. Special offers from mobile
operators have lead to customers, mainly private
individuals, giving up their fixed lines. In March 2004, AS
Starman, a cable TV operator, started to offer fixed voice
connections through its cable network. The opportunity of
hooking up to the Starman cable network brought about, in
the second quarter, an increase in the use of the number
portability facility. If, in the first quarter of 2004, 344
clients switched from Elion to another fixed operator
network, then, in the second quarter, the corresponding
number was 706, and again, the majority were private
individuals.
Revenue growth in the Internet sector slowed down a bit as a
result of stronger competition. The total number of Elion
permanent Internet connections was 58.7 thousand by the end
of June 2004. The net increase in the number of permanent
connections since June 2003 has been 19.5 thousand.
In the second quarter, revenue growth in the IT and data
communications sector was also lower, as the demand for IT
rental services by Estonian firms remained somewhat bellow
our expectations. At the same time, during the second
quarter, Elion Enterprises made a concerted effort to market
its IT and data communication services. In the course of a
couple of months, Elion specialists mapped the IT systems of
approximately 100 firms, and began to service the computer
terminals of more than 500 other firms. Also, the product
portfolio of Elion Enterprises was expanded by a new complex
server service, with a fixed monthly fee, designed for
smaller firms. The company signed a co-operation contract
with Columbus IT Partners to start offering Microsoft
Business Solutions business information systems. The public
tender of the Tallinn Educational Authority, that Elion
Enterprises won a year ago, was completed by connecting
Tallinn’s school computers with a high-speed fibber-optic
network.
The revenues from network services were up by 27%, compared
to the second quarter of 2003. This growth resulted from
international traffic and leased lines rental revenue.
Revenues of the subsidiaries of the Elion Group that are
operating in the network construction area were up by 17% in
the second quarter, with the revenues from outside the Eesti
Telekom Group increasing by 43%. On 3 July 2003, the Finnish
network construction company Eltel Networks Corporation
became involved in the management of the Connecto Group,
since it bought 49% of the shares of AS Connecto, the parent
company of the Connecto Group. On 27 May 2004, the merger
process of the Connecto Group network companies, which had
been started in December 2003, was completed, as a result of
which, AS Connecto, AS Reveko Telekom, and ELTEL Networks AS
were joined up. The merged company will continue its
operations under the trademark Eltel Networks. The aim of
the merger was to improve the Group’s prospects for
development in the Baltic states. The merger of the
companies, which had previously been successfully operating
in different areas of network construction, provides a
chance for the cross- usage of telecommunication and
electricity network construction resources, thus ensuring a
higher level of operational efficiency. For the client, this
means more favourable conditions, stable quality, and the
opportunity to trust all network construction services into
the care of one strong partner. The merged firm forecasts,
for 2004, a turnover of 400 mln EEK in the Baltics. Elion
Enterprises AS has decided to sell, in the first quarter of
2005, at the latest, its 51% ownership of Eltel Networks to
Eltel Networks Corporation.
In the second quarter, the revenues of AS Elion Esindus, a
subsidiary operating in the retail area, were up by 18%.
The growth of the operating expenses of the Elion Group was
caused by three main factors. First, the expansion of
construction and retail activities has been accompanied by
an increase in the expenses incurred in those sectors.
Second, an increase of call minutes into the networks of
foreign operators has generated higher interconnection
payments. Third, expansion of the network construction
sector (both entering the Lithuanian market and expanding
into the electricity network construction field) has
necessitated the hiring of additional staff, which has, of
course, lead to higher personnel expenses. The number of
employees of the Elion Group at the end of June 2004 was
2,065 (June 2003: 1,924; December 2003: 2,014). The number
of employees of Elion Enterprises AS at the end of June 2004
was 1,287 (June 2003: 1,343; December 2003: 1,354).
The Elion Group invested 42 mln EEK in the second quarter of
2004. The majority of investments were made to better
satisfy the needs of the customers and to develop the
networks. The most important investment projects of the
second quarter were the enlargement of the Tallinn - London
data transmission channel and expansion of the broadband
network.
The consolidated revenues of the Elion Group, during the
first six months of 2004, amounted to 1,318 mln EEK, up by
7%, compared to the same period in 2003. Operating expenses
during the period amounted to 882 mln EEK, up by 14%. The
EBITDA of the Group was 436 mln EEK, and the EBITDA margin
was 33%. The net profit for the six months was 96 mln EEK.
In 2003, Elion Enterprises AS paid 200 mln EEK to AS Eesti
Telekom as dividends. In 2004 the dividend payment amounted
to 300 mln EEK. The higher dividends meant that the dividend
tax payment was 35 mln EEK higher than in 2003.
EMT Group
Q2 Q2 Chang HY1 HY Chang
2004 e % 2004 1 e %
200 20
3 03
Total revenues, mEEK 763 683 12 1444 1293 12
EBITDA, mEEK 351 339 3 652 653 -0
EBITDA margin, % 46 50 45 51
EBIT, mEEK 264 253 4 480 478 0
EBIT margin, % 35 37 33 37
Profit before taxes, 267 258 4 487 486 0
mEEK
Net profit for the -14 258 206 275 -25
period, mEEK
CAPEX, mEEK 42 42 0 97 66 47
ROA, % -3 58 22 31
ROE, % 72 95 63 79
The fast development of the Estonian mobile market continued
in the second quarter of 2004. For the EMT Group it meant
fast revenue growth on the one hand, and an extensive growth
of expenses on the other. The consolidated revenues of the
EMT Group in the second quarter of 2004 exceed the
corresponding figure in 2003 by 80 mln EEK, amounting to 763
mln EEK. The operating expenses of the Group were up by 69
mln EEK, amounting to 412 mln EEK. Higher investments made
at the end of 2003 and at the beginning of 2004 have stopped
the reduction of depreciation expenses. The depreciation of
the second quarter of 2004 was at the same level as in 2003.
The pre-tax profit of the EMT Group was up by 4%, amounting
to 268 mln EEK. The net loss in the second quarter was 14
mln EEK as the dividend tax expense (281 mln EEK) was shown
as an expense of the second quarter in the 2004 accounts,
while in 2003, the dividend tax was already shown as an
expense of the first quarter.
The revenues of AS EMT, the parent company of the EMT Group,
were up by 11%, amounting to 666 mln EEK. The revenue
increase of AS EMT is mainly the result of its wider
customer base. The total number of customers of AS EMT, by
the end of June 2004, was 530.6 thousand. The annual net
change in the number of customers was 91.2 thousand. The
increase in the number of customers during the second
quarter of 2004 was 23.1 thousand. There has been an
increase in the number of both prepaid and post-paid
customers. By the end of June 2004, AS EMT had 194.9
thousand prepaid customers (June 2003: 148.2 thousand) and
335.7 thousand post-paid customers (June 2003: 291.3
thousand). The growth has been fuelled by, not only, a
lowering of the end-user tariffs during the mobile price
war, but also by the efforts of many firms to limit their
communication expenses by paying only for their employees’
work-related mobile calls, which has lead to a higher number
of customers using more than one mobile number.
EMT did not remain untouched by the price war. More call
minutes were added to the Simpel starter packages. The price
of the starter packages was cut. Children using EMT’s POP-
card can talk to each other for free until the end of
August. New contractual customers are offered several months
with no monthly fee. In June, discounted tariffs at certain
hours, or for certain customer groups, called Summer Calls,
are becoming a tradition. But, despite these special
discount offers, EMT’s ARPU remained stable. In June it was
393 EEK (March 2004: 391 EEK; December 2003: 410 EEK; June
2003: 443 EEK).
The revenues from GPRS had the highest growth rate - 2.5
times, compared to the second quarter of 2003. The increase
in this sector’s revenues was brought about by, not only, an
expansion of the customer base, but also by the steps taken
to popularize the mobile data communication services among
existing clientele. In the second quarter, the data limits
of the GPRS packages were doubled without raising the
monthly fee. From June on, WAP and GPRS services can also be
used by Simpel prepaid card customers. At the end of June, a
new EMT Go mobile internet environment "opened its doors".
Via the mobile phone, EMT Go integrates the most popular
mobile data communication services and offers updated
information and entertainment services. With this service,
it is possible to read e-mails; find directions; check up on
your bank account; download logos, pictures and games; and
read the latest news. The service is available for all
customers with handsets that enable data communications.
Payments for the service depend on the amounts of data sent
and received by the customer.
On 28 June 2004, AS EMT, the first Estonian operator to do
so, started the development of EDGE, which will make
possible fast data communications. Although EDGE is not yet
a revenue producer, the significance of this development, as
a step into the future, cannot be underestimated. Data
communications are gaining popularity and customers’ demands
are increasing. To keep pace with these developments, EMT
decided to start offering fast data communications by EDGE
before the 3G becomes widely available. During the first
year, EMT plans to invest approximately 15 mln EEK into the
development of EDGE.
Both subsidiaries of the EMT Group - AS EMT Esindused and AS
MWS - have contributed to the revenue growth. The fast-
growing customer base has kept the demand for new handsets
high. Development of mobile data communications has
increased the number of customers interested in phones with
GPRS or EDGE facilities.
The number of customers of all the Estonian mobile operators
has been growing at a fast pace during the last quarters.
That has boosted traffic between operators. The increase in
EMT’s interconnection expenses has been the main factor
behind the big increase in operating expenses. AS EMT
estimates that its market share, based upon the number of
customers, is stable at around 47%. To maintain its market
share, EMT has had to increase its marketing costs. Expenses
related to more handsets sold were the third important
factor behing the OPEX growth. The number of employees of
the EMT Group has been increasing. On 30 June 2004, the EMT
Group had 471 employees, whereas, a year earlier, the number
was 414. The increase in employees has lead to higher
personnel expenses.
The EMT Group invested 42 mln EEK in the second quarter of
2004. Majority of investments were made to improve the
quality of the technological infrastructure.
The consolidated revenues of the EMT Group, during the first
six months of 2004, amounted to 1,444 mln EEK, up by 12%
compared to the same period in 2003. Operating expenses
during the period amounted to 793 mln EEK, up by 24%. The
EBITDA of the Group was 652 mln EEK and the EBITDA margin
was 45%. The net profit for the six months was 206 mln EEK.
In 2003, AS EMT paid 600 mln EEK to AS Eesti Telekom as
dividends. In 2004 the dividend payment amounted to 800 mln
EEK. These bigger dividends meant that this year’s dividend
tax payment was 70 mln EEK bigger than in 2003.
Relations with state regulators
Litigation with the Communications Board
The Communications Board issued a precept on 5 September
2003, obligating Elion Enterprises AS to provide AS Uninet
with special access to Elion’s network at a location and in
a manner stipulated in Uninet’s suit. By now, the
Communications Board has annulled the precept.
The National Communications Board issued a precept to Elion
Enterprises AS regarding the calculation of the domestic
interconnection service charges
On 22 June 2004, the Estonian National Communications Board
(ENCB) issued a precept to Elion Enterprises AS, whereby the
firm has to decrease domestic interconnection service
charges in its telephone network. Pursuant to the precept,
Elion has to apply charges, which were determined by the
ENCB on the basis of Regulation no. 313 of the äCost
Accounting Methodology for Leased Line and Interconnection
Service Charges". The Estonian Government had approved this
new regulation package on 11 December 2003. It prescribes
the cost accounting methodology of SMP, which had been
formulated in cooperation with the Danish consultation
company Andersen Management International AS, the
Association of Estonian IT and Telecommunication Companies,
and the ENCB.
Compared to the interconnection service charges in force up
to the present, the new local level and single transit
interconnection (call termination and call origination)
service charge is approximately 20% lower during normal
time. The precept becomes effective 1 August 2004.
Elion Enterprises has asked the Communications Board for
additional information regarding the calculations that
formed the bases for the precept. After receiving and
analysing the additional information, Elion will make its
decisions concerning appropriate reactions.
Mobile number portability
In June 2004, the Estonian Parliament approved amendments of
the Telecommunications Act, that make it possible to apply
the mobile number portability requirement starting 1 January
2005.
Annual General Meeting of the Shareholders
The Annual General Meeting of the Shareholders of AS Eesti
Telekom, that took place on 18 May 2004, approved the 2003
Annual Report and proposal for profit distribution. It was
decided to increase the legal reserve of the company by 0.3
mln EEK, so that that the legal reserve would meet the legal
requirements, which applied after the increasing of share
capital in June 2003. It was decided, that a dividend of
8.00 EEK per share be paid to the holders of A shares, and
10,000 EEK per share to the holders of B shares. It was
decided, that a total of 1,101 mln EEK be paid to the
shareholders. The list of shareholders, on the basis of
which, dividends were to be paid, was established on 8 June
2004 at 08:00. The dividends were paid out on 17 June 2004.
The Annual General Meeting decided to authorise AS Eesti
Telekom to acquire, within one year (i.e. until 18 May
2005), AS Eesti Telekom A series shares, so that the total
nominal value of AS Eesti Telekom shares held by AS Eesti
Telekom would not exceed the legal limit, and that the price
payable per share would not exceed the highest price paid
for A shares of AS Eesti Telekom on the Tallinn Stock
Exchange on the day of acquiring the shares. The amount of
shares to be acquired shall be determined, on each
individual occasion, by a resolution of the AS Eesti
Telekom’s Supervisory Board.
A new Supervisory Board with seven members (instead of ten
members as in previous years) was elected. Annika
Christiansson, Erik Hallberg, Alo Kelder, Tarmo Porgand,
Kennet Rådne, Mats Salomonsson, and Raivo Vare were elected
to be members of the Supervisory Board.
Deloitte&Touche Audit AS was appointed to audit Eesti
Telekom in 2004.
The Meeting decided to amend the Articles of Association of
AS Eesti Telekom so that it wouldn’t be necessary, in the
future, to notify the shareholders about the Annual General
Meeting by publishing a notice in the Financial Times. It
was also decided to amend the Articles so as to make it
possible to convert the state owned B share into one hundred
A shares of AS Eesti Telekom in connection with the
termination in May 2004 of the Shareholders Agreement
concluded in 1998.
The share capital enlargement of AS Eesti Telekom
100 additional A shares of AS Eesti Telekom were issued in
May 2004, which were used to convert the B share owned by
the government of Estonia.
From 2 May 2004 until 2 June 2004, employees of the Eesti
Telekom Group covered by the share option program could
convert their B-series bonds for A shares of AS Eesti
Telekom at the issue price of 90.62 EEK per share. The total
number of B-series bonds outstanding as of 1 May 2004 was
34,125. By 2 June 2004, the owners of B-series bonds
subscribed 310,000 AS Eesti Telekom A shares for the
exchange of 31,000 B-series bonds. The Management Board of
AS Eesti Telekom approved the subscription list, and
submitted an application to the Registry Department of the
Tallinn City Government for the registration of 310,000
A-series shares with a nominal value of 10 EEK and an
issue price of 90.62 EEK, i.e. an issue premium of 80.62
EEK. 3,125 B-series bonds were redeemed for the bond’s
nominal value of 10 EEK plus the accumulated interest, based
upon an interest rate of 7% per annum.
The shares issued are, in all respects, equivalent to the
existing AS Eesti Telekom A-series shares. The new shares
entitle shareholders to dividends as of the 2004 financial
year.
The total number of AS Eesti Telekom A shares, after the
emission of the new shares, is 137,954,528, and the share
capital is 1,379,545,280 EEK. A shares are distributed
between the main groups of shareholders as follows:
No of shares %
Baltic Tele AB 67,317,756 48.80
Republic of Estonia 37,485,100 27.17
Public investors 33,151,672 24.03
The cash offer
On 29 April 2004, Baltic Tele AB, a large shareholder of AS
Eesti Telekom, made an offer to acquire all shares of AS
Eesti Telekom, not already owned by Baltic Tele AB, from the
shareholders of AS Eesti Telekom. The offer price was 111.30
EEK per each A share and 11,130 EEK per B share. The period
of acceptance of the offer started on 30 April 2004 and
ended on 10 June 2004. The offer was conditional. For the
completion of the offer it was necessary to obtain the
approval of the Estonian Competition Board for the
acquisition of control over AS Eesti Telekom, and to get
acceptance of the offer to the extent that it would ensure
for Baltic Tele AB an 85% share of AS Eesti Telekom.
Since the second condition of the offer was not satisfied by
the end of the offer period, the rights and obligations
determined by the offer did not arise.
Hille Võrk
Financial manager
6 272 460
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