Current reports

WARSAW, Poland – May 5, 2005 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced its share capital has increased in connection with the exercise of certain warrants and options issued by Netia.

 

As of May 1, 2005, Netia’s issued and outstanding share capital was PLN 390,075,157 and represented 390,075,157 shares, PLN 1 par value per share, each share giving right to one vote at Netia’s general meeting of shareholders.

 

As of May 4, 2005, Netia’s issued and outstanding share capital was PLN 392,429,565 and represented 392,429,565 shares, PLN 1 par value per share, each share giving right to one vote at Netia’s general meeting of shareholders.

 

A motion for the registration of the share capital increase as of May 1, 2005 by the Polish court will be filed on May 6, 2005.

 

In connection with the settlement by Krajowy Depozyt Papierów Wartościowych w Warszawie SA (Polish National Depositary for Securities) (“KDPW”) of transactions regarding the exercise of 27,221,389 two-year subscription warrants and 11,998,847 three-year subscription warrants until May 1, 2005 (inclusive), and additional 2,348,234 two-year subscription warrants and 6,174 three-year subscription warrants on May 2-4, 2005, Netia issued 39,220,236 series J shares until May 1, 2005 and further 2,354,408 series J shares on May 2-4, 2005 at an issue price of PLN 2.53 per share.

 

Each series J share entitles its holder to one vote at Netia’s general meeting of shareholders. Netia’s series J shares are publicly traded on the Warsaw Stock Exchange (“WSE”) under the same code as all other ordinary shares of Netia i.e. PLNETIA00014.

 

The subscription warrants were exercised in accordance with Netia’s Polish prospectus, dated April 17, 2002, as amended.

 

As of May 5, 2005, 20,419,200 three-year subscription warrants under the ticker “NETPPO3”, entitling their holders to subscribe for Netia’s series J shares by April 29, 2006, will be traded on WSE.

 

Due to the expiration, on April 29, 2005, of the two-year subscription warrants, that day was the last day of subscription for series J shares authorized from these warrants (see Netia’s press release dated April 4, 2005).  

 

Information with regard to the exercise of all two-year subscription warrants, resulting from the subscriptions for series J shares made until April 29, 2005, will be published promptly in a separate announcement following the settlement of transactions of their exercise by KDPW.

 

Until May 1, 2005, Netia issued 934,099 series K shares in connection with the exercise of certain options granted under the performance stock option plan adopted by Netia’s supervisory board on June 28, 2002, as amended. The total number of series K shares that may be issued under this plan will not exceed 18,373,785 shares.

 

Current information on Netia’s share capital increases is constantly updated and made available at the Polish National Depositary for Securities and WSE as well as on Netia’s website (www.investor.netia.pl). The share capital as currently registered by the Polish court, in the amount of PLN 379,583,708, reflects, with respect to series J shares, the status as of April 1, 2005, and will be amended following the consideration of the motion for the share capital increase to be filed with the court on May 6, 2005.