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10 December 2001

Netia Holdings S.A. tender offer expires


WARSAW, Poland - December 10, 2001 - Netia Holdings S.A. (the "Company" or "Netia") (Nasdaq: NTIA, WSE: NET), Poland's largest alternative fixed-line telecommunications services provider, today announced that as of 5:00 p.m. New York City time on December 7, 2001, the tender offers for the 10 1/4% Senior Dollar Notes due 2007 of Netia Holdings B.V., the 11 1/4% Senior Discount Dollar Notes due 2007 of Netia Holdings B.V., the 11% Senior Discount DM Notes due 2007 of Netia Holdings B.V., the 13 1/8% Senior Dollar Notes due 2009 of Netia Holdings II B.V., the 13 1/2% Senior Euro Notes due 2009 of Netia Holdings II B.V., and the 13 3/4% Senior Euro Notes due 2010 of Netia Holdings II B.V., commenced on November 8, 2001 had expired without the minimum tender level conditions being satisfied. Accordingly, the Company announced that it will not accept for purchase any of the notes tendered or accept the consents that it received pursuant to the consent solicitations conducted as part of the tender offers, and will promptly return all of the notes tendered.

Kjell-Ove Blom, Netia's acting CEO and Chief Operating Officer, said: "We commenced the tender offers with the hope and desire that we could return some value to bondholders while utilizing a portion of our available cash to substantially reduce our debt burden. We are gratified that a significant number of bondholders responded positively to the tender offers. However, we did not obtain sufficient participation to justify purchasing bonds in the tender. We now intend to engage in discussions with our bondholders concerning a consensual reorganization of our balance sheet, although, of course, we cannot guarantee a successful result. In the meantime, we continue to operate our business and we wish to express publicly our appreciation to our customers, suppliers and employees for their continued support."

Netia is the leading alternative fixed-line telecommunications provider in Poland. Netia provides a broad range of telecommunications services including voice, data and Internet-access and commercial network services. Netia's American Depositary Shares ("ADSs") are listed on the Nasdaq National Market (NTIA), and the Company's ordinary shares are listed on the Warsaw Stock Exchange. Netia owns, operates and continues to build a state-of-the-art fiber-optic network that, at September 30, 2001, had connected 343,634 active subscriber lines, including 93,713 business lines. Netia currently provides voice telephone service in 24 territories through Poland, including in six of Poland's ten largest cities.


This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consents with respect to any Notes. The tender offer and consent solicitation was made solely pursuant to the terms of the Offer to Purchase and Consent Solicitation dated November 8, 2001.

 

Some of the information contained in this news release and the Offer to Purchase and Consent Solicitation contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained in the Offer to Purchase and the documents incorporated therein by reference identify important factors that could cause such differences. For a more detailed description of these risks and factors, please see the Offer to Purchase and the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F filed with the Commission on April 30, 2001, its Current Report on Form 6-K filed with the Commission on May 15, 2001, its Current Report on Form 6-K filed with the Commission on August 7, 2001, and its Current Report on Form 6-K filed with the Commission on November 6, 2001. The Company undertakes no obligation to publicly update or revise any forward-looking statements.