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29 August 2002

Creditors accept arrangement proceeding plan for Netia subsidiary


WARSAW, Poland - August 29, 2002 - Netia Holdings S.A. (Nasdaq: NTIAQ, WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services, today announced that creditors of Netia South Sp. z o.o., one of its subsidiaries, representing 100% of total value of claims voted on August 29, 2002 in favor of the arrangement plan submitted to the court in Warsaw. The arrangement plan for Netia South Sp. z o.o. is currently awaiting the required approval by the court, which is expected to be issued on September 18, 2002.

Detailed conditions of the arrangement plan for Netia South Sp. z o.o. accepted today are as follows:

  1. 99 % of the debts subject to the arrangement plan will be written off;

  2. Creditors will be repaid in annual installments;

  3. Installment obligations will be denominated in Polish zloty, will be zero coupon and shall be payable on the last day of each consecutive calendar year during the period when the arrangement plan is in force:

    1. The first installment payable on December 31, 2003 shall be equal to 33.3% of the reduced claims subject to the arrangement;

    2. The second installment payable on December 31, 2004 shall be equal to 33.3% of the reduced claims subject to the arrangement plan;

    3. The third installment payable on December 31, 2005 shall be equal to 33.4% of the reduced claims subject to the arrangement plan;

The obligations under the arrangement plan will not be secured by any form of security interest.


Some of the information contained in this news release contains 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. For a more detailed description of these risks and factors, please see the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 20-F filed with the Commission on March 28, 2002, its Current Report on Form 6-K filed with the Commission on April 3, 2002, its Current Reports on Forms 6-K filed with the Commission on May 6, 2002, its Current Report on Form 6-K filed with the Commission on May 7, 2002, its Current Report on Form 6-K filed with the Commission on May 20, 2002, its Current Report on Form 6-K filed with the Commission on May 24, 2002, its Current Report on Form 6-K filed with the Commission on June 28, 2002, its Current Report on Form 6-K filed with the Commission on July 2, 2002, its Current Report on Form 6-K filed with the Commission on July 31, 2002, and its Current Report on Form 6-K filed with the Commission on August 2, 2002, its Current Reports on Form 6-K filed with the Commission on August 6, 2002, its Current Report on Form 6-K filed with the Commission on August 9, 2002, its Current Report on Form 6-K filed with the Commission on August 15, 2002 its Current Report on Form 6-K filed with the Commission on August 16, 2002 and its Current Report on Form 6-K filed with the Commission on August 28, 2002.. The Company undertakes no obligation to publicly update or revise any forward-looking statements.