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WARSAW, Poland – June 7, 2007 – Netia SA (“Netia”) (WSE: NET), Poland’s largest alternative provider of fixed-line telecommunications services, today announced that on June 6, 2007 it concluded an agreement for the acquisition of assets of substantial value, i.e. the following shares in telecommunications companies:

 

·         100 shares in the share capital of a company operating under the business name KOM-NET Systemy Komputerowe Sp. z o.o. with its seat in Wrocław (“Kom-Net”) with the nominal value of PLN 500 each and the total nominal value of PLN 50,000 for all these shares, which represent 100% of the share capital and confer the right to 100% of the votes at the general meeting of shareholders,

·         the total price of all the shares has been set at PLN 9,418,000, i.e., PLN 94,180 per one share,

·         Kom-Net is a company conducting telecommunications activities; as at the date of the agreement conclusion, it provided Internet access services to 7,254 subscribers.

 

·         100 shares in the share capital of a company operating under the business name Lanet Sp. z o.o. with its seat in Wrocław with the nominal value of PLN 500 each and the total nominal value of PLN 50,000 for all these shares, which represent 100% of the share capital and confer the right to 100% of the votes at the general meeting of shareholders,

·         the total price of all the shares has been set at PLN 10,076,000, i.e., PLN 100,760 per one share,

·         Lanet is a company conducting telecommunications activities; as at the date of the agreement conclusion, it provided Internet access services to 8,223 subscribers.

 

·         all shares in the share capital of the company to be created as a result of transforming a company operating under the business name MAGMA SYSTEMY KOMPUTEROWE Schmidt i S-ka S.J. with its seat in Wrocław (“Magma”) into a limited liability company,
·         the total price for all the shares has been set at PLN 7,830,000, increased by the value of the cash in hand and at bank and reduced by the value of the interest-bearing debts of the company,
·         Magma is a company providing telecommunications activities; upon the conclusion of the final agreement the company created as a result of the aforementioned transformation shall have 6,346 subscribers to whom it will provide Internet access services,
·         the conclusion of the final agreement is contingent on the transformation of Magma into a limited liability company.

 

In parallel with the conclusion of the above mentioned share purchase agreements, Netia concluded a management services contract with the sellers of the above-mentioned enterprises. The amount of the managerial services fee is dependant on the number of customers to be acquired within the term of the contract, i.e., until May 31, 2009. 

 

In the case of Acquisition I, the sellers were Mr. Piotr Szulc, Mr. Zbigniew Klóska and Ms. Anna Kraucz-Miękus. In the case of Acquisition II: Mr. Adam Gajewski, Mr. Patryk Dawidziuk and Mr. Grzegorz Marszałek. In the case of a preliminary agreement regarding Acquisition III: Mr. Piotr Schmidt and Mr. Jacek Pióro.

The assets described above were acquired from Netia’s own resources and constitute an investment of a long-term nature.

The shares acquired constitute assets of substantial value, as they represent 100% of the share capital of the entities.

Apart from the contractual relations described in this report, there exist no other ties between Netia and the persons managing or supervising Netia and the sellers of the aforementioned assets.