TALLINN STOCK EXCHANGE

ANNOUNCEMENT

04.02.99

 

 

TSE’S CLARIFICATION ABOUT THE PROCESS OF DETERMINING THE PRICING AND 

ALLOCATION PRINCIPLES OF THE INITIAL PUBLIC OFFERING OF ESTONIAN 

TELECOM

 

The standpoint of the TSE, which we have also continuously expressed to 

the  Consortium organizing the IPO of Estonian Telecom, is that the 

detailed disclosure of the order of determining the final price of the 

shares and allocation principles applied in case of oversubscription, 

is important and necessary in order to ensure the transparency of the 

IPO and investor confidence in it.

 

We have made a proposal to the Seller and Consortium organizing the IPO 

to affirm their resolute intention to disclose the above-mentioned 

principles no later than the day after the subscription results are 

clarified, i.e. February 11, 1999. Such affirmation would help to 

overturn the public’s continuos skepticism, since the obligation to 

disclose the allocation principles would significantly decrease the 

probability that unjust or unreasonable preferences given to certain 

investor groups are left unnoticed by general public. Thus, the 

investors’ confidence towards the IPO would increase, enabling them to 

make informed investment decisions, unaffected by contradictory 

information. 

 

In its 04.02.99 announcement to the TSE, signed by the representatives 

of Nomura International and ABN-AMRO Rothschild, the Consortium has 

confirmed the following:

 

1. The final decision about the allocation of shares will not be made 

by the Consortium, but by the Seller, the Republic of Estonia, which 

is represented by the Ministry of Transportation and Communications 

(“Seller”), following the close of the subscription period, after 

consultation with Consortium. 

2. Allocations to the Estonian investors will be executed on a 

mathematical basis, determined by the final level of subscription.

3. Preferences to investor groups will be made only in accordance with 

the order stated in the public offering prospectus.

4. No other investors, either Estonian or international, have been, or 

will be given, any guarantees with respect to allocations. The 

allocations will not vary according to the ECDS account operator 

bank used to place the subscription order.

5. Consortium’s standpoint is that the allocation of shares should be 

based upon solely the above principles.

6. Once the allocation principles in relation to the Estonian offering 

have been finalized and allocations to Estonian investors have been 

successfully implemented, it is the intention of Consortium that 

there will be full transparency with respect to such principles. For 

this purpose, the Consortium will advise the Seller to disclose 

publicly the principles upon which the allocation in Estonia was 

based immediately after the successful completion of the offer.

 

TSE