The Board of Directors of Southern Telecom Company (STC) passed a resolution on May 29, 2003 to launch a bond issue for the Company.  Placement is slated for July 2003. 

The corporate bond, worth RUR 1.5 billion, will be placed at face value of RUR 1,000 by public offering at the Stock Exchange Section of the Moscow Interbank Currency Exchange (MICEX) with a 3-year term to maturity.  The form of the bond is a series 01 non-convertible pay-to-bearer interest bearing documentary issue with mandatory centralized custody.

Overall, a total of six 6-month coupons are to be paid out.  Yield on the first coupon is to be fixed during the auction at the time of placement. The yield for all other coupons will be equal to the interest rate for the first coupon. 

The organizers of the issue are Renaissance Capital and Financial Consultant and Industrial and Construction Bank (Saint Petersburg). 

The underwriter for the issue will be Renaissance Broker, while the depositary and payment agent will be National Depositary Center, a non-commercial partnership.

All funds raised are to be allocated to finance the investment projects of Southern Telecom Company within the framework of the 2003 Plan for Capital Construction, a large part of which calls for acquiring equipment for the expansion and construction of digital switching equipment, high-speed Internet access connections and increased length of the Company’s telecom networks.

The resolution concerning the bond issue, with the emission prospectus outlining the terms and conditions of the issue and an investment memorandum will be posted on the Company’s corporate website, and can be viewed at www.stcompany.ruafter clearance is received from the Federal Securities Commission of the Russian Federation.