On December 27, 2010 JSC North-West Telecom purchased 100% of shares of Severen-Telecom CJSC, a largest operator of broadband access to the Internet (BRB), channel lease, and telephony for corporate clients and operators in St. Petersburg and Leningrad Oblast.

The amount of the transaction was US$27.8 million (RUR850 million*), less the company’s liabilities. As of the date of the purchase, the net debt of Severen-Telecom was RUR 60 million.

Severen-Telecom is a largest BRB and telephony operator for corporate clients in St. Petersburg and some towns in Leningrad Oblast (Gatchina, Krasnoye Selo, Sertolovo, Kolpino, Shushary), providing services to over 2,700 corporate clients and communication operators. The company’s revenue were RUR 436 million in 2009, and RUR 327 million in 9 months of 2010, having grown by 11% against the similar period in the last year.

Severen-Telecom owns one of the most ramified fiber optic networks in St. Petersburg and its suburbs of a total length of over 1,200 km, and is present in 210 business centers. The company’s own capacity is 27,820 telephone numbers, of which 7,300 used by existing subscribers.

Commented Vladimir Akulich, CEO of North-West Telecom, “The purchase of Severen-Telecom focused on services to corporate clients will enable N.W.Telecom to greatly enhance its market positions in the B2B segment on the high-margin market of St. Petersburg and Leningrad Oblast.”

*At the official exchange rate of the Bank of Russia as of the transaction date, RUR 30.5778 per US dollar.