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Mid Europa, Lehman Brothers and Al Bateen to acquire CRa & 39.2% of T-Mobile Czech Republic

23 November 2006

Mid Europa Partners, Lehman Brothers and Al Bateen announced today that they have acquired 100% of Radiokomunikace a.s. ("CRa") and 39.2% of T-Mobile Czech Republic a.s. ("TMCZ").

The transaction will be partly funded with senior and mezzanine debt financing in the amount of EUR 750 million,  the largest debt package to date for a Central European leveraged acquisition, in addition to a substantial equity contribution from the sponsors.

CRa is the only national provider of TV and radio broadcast transmission services and a leading alternative provider of telecommunications services in the Czech Republic.

TMCZ is the market leader in mobile telecommunications services in the Czech Republic with approximately 4.8 million subscribers, representing over 40% market share of subscribers and is one of the few major CEE mobile assets not wholly-owned by a major operator.

Craig Butcher, Partner of Mid Europa, said: "This is a landmark transaction as the largest Central European buy-out to date and we are pleased to be returning to the Czech telecommunications market following our recent exit from Karneval.  Mid Europa has a successful track record of investing in the sector and this transaction will represent our third investment in the country and our fourth in a mobile operator. We look forward to contributing our sector expertise and strong, regionally-focused resources as we support CRa's digital broadcasting roll-out and its efforts to compete more effectively in the telecommunications sector".

Vittorio Pignatti, Vice Chairman, Lehman Brothers & Head of Private Equity Europe, said: "This milestone deal is a result of the Firm's expertise in the telecommunications industry and its longstanding relationships with the major operators. The deal incorporates the acquisition of two very attractive assets in the Czech Republic, a country with sound economic fundamentals and strong growth prospects and is a good example of Lehman Brothers' unique sourcing model of proprietary investment opportunities capitalizing on the Firm's extended network. "

Al Bateen Investment Co. LLC, an investment holding company based in Abu Dhabi, United Arab Emirates is the third investor in the consortium. Commenting on the deal, Robin Rice, Strategic Development Executive at Al Bateen said: "This is our first transaction in the Czech Republic and perfectly complements our international investment strategy of acquiring significant stakes in strong and stable businesses worldwide. In our view, both Radiokomunikace and T-Mobile Czech Republic are such first class assets with proven value."

Commenting on the transaction, Miroslav Curin, CEO of CRa said that management looks forward to continuing to work at CRa under its new ownership. "We are pleased that the business was attractive to the consortium as a target and hope to benefit from their active involvement in our business as we create further shareholder value."

Ernst & Young acted as exclusive financial advisor to the consortium. Robin Jowitt, TMT Partner, Ernst & Young LLP said "Our ability to assemble a world class management team, and local market insight was crucial in bringing together the investors for this landmark transaction. We have excellent relationships in the UAE and this deal represents the first major buyout involving a Middle Eastern investor with European partners in the region. It's a fantastic deal which we are proud to have originated."


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