AS EESTI TELEKOM       ANNOUNCMENT         October, 31  2005

 

Closing of purchase of IT-provider MicroLink

 

Today contracting  parties  executed  the  closing  of  the  purchase  of  96%  of

MicroLink AS, the leading Baltic IT services  company.  MicroLink  Eesti  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.





The aim of the acquisition of MicroLink Eesti 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  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.



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  Eesti  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

575 employees and is present in all three Baltic countries. MicroLink's  2004/2005

financial year net revenue was 35.5 million  Euros  and  net  profit  1.3  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 1515.





Hille Võrk

AS Eesti Telekom

+372 6 272 460