Current reports

WARSAW, Poland – October 27, 2005 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that on October 26, 2005 Netia Ventures Sp. z o.o. with its seat in Warsaw (“Netia Ventures”), Netia’s subsidiary, entered into an agreement on registered pledge on shares regarding 10,260 shares in P4 Sp. z o.o. with its seat in Warsaw (“P4”), operating previously under the company name Netia Mobile Sp. z o.o., which are Netia Ventures’ assets. The pledge was established for the benefit of Novator Poland Pledge Sp. z o.o. with its seat in Warsaw (“Novator”) in order to secure the performance by Netia Ventures of the claims that may arise due to failure by Netia Ventures to perform certain obligations under the Shareholders Agreement (see Netia’s press release dated August 23, 2005). Maximum amount of collateral equals to EUR 25,000,000 (twenty five million). The nominal value of said shares equals PLN 5,130,000 (five million one hundred and thirty thousand). The shares represent 29.9% of current P4’s share capital and authorize their holder to exercise 10,260 of votes at the shareholders’ meeting of P4. P4 shares are Netia Ventures’ investment of a long-term nature. Until the registration of the pledge in the National Register of Pledges the shares will be subject to an ordinary pledge.

 

Novator Telecom Poland SARL (“Novator Telecom”) shall establish the pledge for the benefit of Netia Ventures on all shares held by Novator Telecom in P4 on the same terms as indicated above in order to secure the performance by Novator Telecom of the claims that may arise due to failure by Novator Telecom to perform certain obligations under the Shareholders Agreement.

 

The above mentioned shares represent jointly with 30 shares, on which the pledge was registered by the court on September 21, 2005 (see Netia’s press release dated September 27, 2005), all shares of Netia Ventures in P4.