On October 31 the merger of operators in the North-Western region of Russia was completed.  As of today, nine branches have merged to form OJSC North-Western Telecom: Artelecom Arkhangelsk region, Elektrosvyaz Vologda region, Elektrosvyaz Kaliningrad region, Elektrosvyaz Republic of Karelia, Murmanskelektrosvyaz, Novgorodtelecom, Petersburg Telephone Network, Elektrosvyaz Pskov region, and Cherepovetselektrosvyaz.

The delisting of merged entities from the Unified State Register of Legal Entities constitutes the next stage in the formal part of the merger.  The technical procedure of the merger was carried out in one day, at which time the shares of the merged entities were swapped for shares in OJSC North Western Telecom.

The company's new shares will be tradable only following state registration of the reports on issue results filed with the Federal Securities Commission of the Russian Federation.  These documents are expected to be drafted and submitted to the Commission in the very near future. The final stage of the formal part of the merger will be the holding of a joint general shareholders meeting of the merged company, during which the appropriate additions and amendments will be made to the charter of OJSC North Western Telecom, and the company's managing bodies will be reelected.  According to company data, the final stage will take place before February 2003.  Following the registration of additions and amendments to the charter the final stage of the merger will be considered to be complete.

In this regard, the chief executive office of North Western Telecom Alexander Sysoeyev was quoted as saying:

"The merger is necessary in order to raise the competitive ability and expand the range of telecom services available.  The basis for successful activity by the merged company is the establishment of a single corporate environment and a hard-working team of like-minded individuals.  We've been working on this.  The bottom line is that by enlarging the scale of our business and reinforcing internal resources we will be able to considerably strengthen the company's positions on the domestic telecommunications market". 

For the record 

An extraordinary general shareholders meeting was held on November 28, 2001 in Saint Petersburg at which OJSC Petersburg Telecommunications Company passed a resolution to merge eight subsidiaries operating in the North Western region of Russia. When the votes were tallied 97.8% of the shareholders of common and preferred stock in attendance voted in favor of the merger.  The shareholders also cast a vote to change the name of the company to North Western Telecom.  Previously shareholders from the merged entities had held voting, with an overwhelming majority ranging from 90.1% to 99.5%, to approve the merger. A shareholders meeting held by OJSC PTS was the final one in a set of EGMs which took place from November 19 - 26, 2001.  

A shareholders meeting held by OJSC North Western Telecom on June 25, 2002 approved the revised version of the charter, which incorporated eight branches.  The total value of common shares (with a par value of rub 1) to be issued during the merger process is as follows:  

·         common shares - for a total of 262, 898, 773 (two hundred and sixty two million eight hundred and ninety eight thousand seven hundred and seventy three) rubles;

·         type A non-document preferred shares - for a total of 87,646,542 (eighty seven million six hundred forty six thousand five hundred and forty two) rubles.

The swap ratios of shares were approved based on bilateral merger agreements between OJSC North Western Telecom and each of the merged entities.

The common and preferred shares of OJSC North Western Telecom are divided up between shareholders of the merged entities as follows: