Krasnodar, 24 March 2006: Southern Telecommunications Company (“UTK”) [(RTS: KUBN; OTC: STJSY), the principal fixed-line telecommunications provider for Russia’s Southern Federal District, reports that its Board of Directors assigned a 10.9% interest rate to the fourth, fifth and sixth coupons of its 03-series bond issue (Minutes ? 28 ?f 24 March 2006). Thus, Rub 54.65 will be paid out per bond. 

According to the Decision on 03 series bond issue, the third coupon is callable from April 3 to 7, 2006.  The call option will be exercised on 14 April 2006. The date of the call option is determined as the 5th  business day from  the third coupon payment date.

The Notification shall be sent by registered letter or express delivery service at the address: Securities Transactions Department, OJSC AKB “Rosbank”, mailbox 208, 11, Masha Porivayeva Str., Moscow, 107078. The Notification can also be faxed to (095) 725 24 05 on any business day within the corresponding period of presenting series-03 bonds for redemption. You can familiarize yourself with the form of the Notification on the intention of the bond owner to sell to the Issuer a certain number of Bonds here.

Information about the bond issue:

UTK’s issue of 03-series non-convertible interest-bearing documentary pay-to-bearer bonds is for a total of RUR 3.5 bln with maturity of 5 years (1830 days), semi-annual coupon periods (183 days) and a buyback option every year and a half. The interest rate of 12.3% per annum on the  first, second and third coupons was fixed at the bond placement (October 06, 2004, MICEX). The coupon rate for coupons 4–6 is to be set by the Company no later than 10 business days prior to the redemption date of the third coupon. The coupon rate for coupons 7–10 is to be set by the Company no later than 10 business days prior to the redemption date of the sixth coupon. The state registration number is 4-07-00062-? dated August 17, 2004, trading codes are UTK-03?b., ISIN RU000A0DD202. Arranger of series 03 bond issue is AKB Rosbank. Co–arranger of the bond issue is Promsvyazbank. Financial Consultant is  FFK. UTK-Finance Ltd. acts as UTK’s underwriter. Additional information on the issue can be obtained here.