Government shares of Azercell Telecom get privatized

Baku, February 12, 2008

Government shares in Azercell Telecom Joint Venture, the largest mobile network operator of Azerbaijan have got its privatization. These shares in the amount of 35.7% of fixed capital of Azercell Telecom JV have been acquired by Azertell Telekommunikasyon Yatırım Dış Ticaret A.Ş. Company for USD 180 million. For this reason, the sales contract has been signed between the said Company and the State Committee for Public Properties Management on February 11, 2008.

We should note that several organizations reporting to the Ministry of Communications and Information Technologies, as well as Joint Ventures formed with their participation are announced for privatization even since 2001. The State Committee for Public Properties Management has established a Task Force which is entitled to re-evaluate the Government shares in the fixed capital of Azercell Telecom JV. Besides this Task Force, Ernst and Young, the international advisory institution has been also involved in this operation to lead privatization procedures and extend advisory services in signing the relevant agreements. This institution has prepared the report for evaluating governmental shares in line with international norms and standards. It is indeed in accordance with this report, the worth of 35.7% governmental shares in Azercell Telecom JV has been defined as equal to 180 (one hundred eighty) millions US dollars.

In accordance with current legislation, governmental shares have been firstly proposed to the founder of the joint venture - Azertell Telekommunikasyon Yatırım Dış Ticaret A.Ş. Company. The latter has agreed to acquire the shares. As the outcome of talks and discussions, the sales contract on acquiring governmental shares has been signed recently. Both sides have signed the sales contract on 11 February 2008. The document has been signed by Mr. Tero Kivisaari, Chairman of the Board of Directors of Azertell, Mr. Pietari Kivikko, member of the Board of Directors and Mr.A.Halim Ateş, Azercell Telecom CEO on the one hand, and Mr. Rustam Shahbazov, Deputy Chairman of the State Committee for Public Properties Management and Mr.Iltimas Mamedov, Deputy Minister of Communications and Information Technologies as government’s representatives on the other hand.

On this day, Azercell Telecom with its 3 millions subscribers is the largest mobile operator offering the highest quality communications services in the country. Founded in 1996 and functioning since the same year, this Company has invested almost USD700 millions in Azerbaijan. Prior to privatization, there were two shareholders of Azercell Telecom: Ministry of Communications and Information Technologies of Azerbaijan (35.7%) and Fintur Holdings BV (64.3%). By-turn 58% of Fintur Holdings BV belongs to TeliaSonera- the first-rate mobile operator of Scandinavia and 42% to Turkcell.