A formal completion of transaction whereby Russian national long-distance operator Rostelecom sells its 50 per cent stake in Sovintel to Golden Telecom has taken place today. 

Pursuant to the terms of the deal, Rostelecom sells to Golden Telecom its 50 per cent stake in the telecommunications operator Sovintel. In exchange for the stake in Sovintel Rostelecom is receiving $56 million in cash, 15% of Golden Telecom??s shares and representation on Golden Telecom??s Board of Directors.  

During the meeting among representatives of the companies involved in the deal, a set of documents was signed, regulating acquisition by Rostelecom of 15 per cent stake in the holding company and representation on the Board of Directors of Golden Telecom. The documents included Subscription Agreement, Standstill Agreement, Registration Rights Agreement and a new Shareholders Agreement etc. 

Serguei I. Kuznetsov, General Director of Rostelecom, and Alexander A. Lutsky, Chief Accountant of the Company, participated in today??s meeting on behalf of Rostelecom. 

As the General Director of Rostelecom Serguei I. Kuznetsov stated after the signing ceremony ?°this event has become the next stage in implementation of the Company??s strategy to spin off non-core assets. Today we are trying to realign the structure of Rostelecom in such a way that the Company could be in a position to independently tackle the issues it faces, not through it??s affiliated companies?±. Mr. Kuznetsov also noted that the deal would be reflected in the Company??s financial statements for the year 2002. 

Gamma Group and Clifford Chance P??nder acted as advisors to Rostelecom.
Golden Telecom was advised by Alfa Group and LV Finance. 

Certain statements in this press-release are ?°forward-looking statements?± within the meaning of the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby.

These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. 

These risks include the risk of changes the Company??s operations and business prospects, the general financial and economic circumstances,  relating to regulation of the Russian telecommunications industry and the Russian legislation; the competition and other risks.

For a more detailed discussion of these and other factors, see the Company??s Annual Report on Form 20-F for its most recently completed fiscal year and the Company??s other public filings with The U.S. Securities and Exchange Commission.  Many of these factors are beyond the Company??s ability to control or predict.  Given these and other uncertainties, the Company  cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. 

The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as maybe required under applicable the U.S. federal securities laws.

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