Nizhny Novgorod, March 2005: On March 15, 2005 OJSC “VolgaTelecom” stopped its participation in the charter capital of Samara’s telecom operator – CJSC “Samarasvyazinform” by selling the equity stake that belonged to OJSC “VolgaTelecom” to one of the company’s shareholders.

The transaction was made in accordance with the model of affiliated business reorganization approved by OJSC “VolgaTelecom” Board of directors on October 26, 2004; one of the provisions of the model stipulates termination of membership in affiliated companies where the Company does not possess controlling stake, and hence it is not possible to control and have effect on the enterprise activity.

OJSC “VolgaTelecom” has sold 11 ordinary shares making up 16,9% of the charter capital. In accordance with CJSC “Samarasvyazinform” Charter when a part of shares and equity stakes are sold other shareholders and equity stake owners of the company have preemptive right. So, the equity stake was sold to one of the company’s shareholders having preemptive right to buy out the stake belonging to OJSC “VolgaTelecom”.

Currently OJSC “VolgaTelecom” possesses equity stakes in the charter capital of over 50 companies of various activity lines. The model of affiliated business reorganization stipulates the sale of a part of non-core assets in order to improve the efficiency of affiliated business management.

CJSC “Samarasvyazinform” was established in 1991 and has the licenses for rendering the services of local telephone communication, personal radio call, voice communication of telematic service, voice information transfer and communication channels lease.

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OJSC “VolgaTelecom” is the largest telecommunication company of the Volga region providing telephony, cellular communication, Internet and data transfer, television and radio broadcasting services. The Company was established in 2002, when within the terms of communication industry restructuring, 11 telecommunication operators of the Volga Federal district were consolidated into OJSC “VolgaTelecom”. The installed capacity of consolidated company - 4,7 million numbers. The Company’s shares are traded at RTS and MICEX. Since 1997 I-level American Depositary Receipts program is carried out, the specified receipts being traded at Frankfurt, Berlin stock exchanges and at the USA OTC market.