Netia stocks soar after largest investors reach agreement on share issue

Shares of ailing independent telecom operator Netia soared Friday on the Warsaw Stock Exchange (WSE) as Netia's two largest shareholders, Telia of Sweden and investment fund Warburg Pincus, finally reached an agreement regarding the issue of 600 million new shares. The two parties had disagreed on the idea suggested by Netia's management, with Warburg opposing the plan. The shares were to be purchased by Netia's creditors, who would thereby take control of the company. The price demanded by Warburg was perceived as too high, convincing Telia at the time that it was more reasonable to declare Netia bankrupt. Although Telia's Investor Relations Department Head Tobias Lenner confirmed that an agreement had been signed, he refused to reveal any details. "The solutions we have undertaken will help us save Netia without having to invest any additional funds," he told Gazeta Wyborcza. According to Wyborcza's sources, the creditors are still hesitant to accept Telia's share issue conditions, which are apparently much worse than those neg otiated privately several weeks ago between the creditors and minority shareholders. Marcin Sojka, an analyst with the BM BGZ brokerage house, finds it alarming that Telia is persistently refusing to inject Netia with new funds at a time when it needs an active sector investor. (Gazeta W yborcza, Feb. 9-10, p. 26) M.T.K.