On December 24, 2004, in accordance with the decision of the Board of Directors (Session Minutes No. 38-04 of 29.10.2004) N. W. Telecom sold its 48.97% of CJSC Neva Kabel shares.  The transaction amount was EUR 800,000.

CJSC Neva Kabel is a leading telephone cable manufacturer in the North-West of Russia. Its earnings in 9 months of 2004 according to RAS were RUR 395,788, and the net profit, RUR 48,478,000.

The buyer of the shareholding is Suomen Kaapelitechdas Holding Oy registered under the laws of Finland and affiliated to Draka Holdings, the world leader in the manufacturing of telephone and signal/block cable. 

The shares of CJSC Neva Kabel were sold as part of N. W. Telecom’s strategy to dispose of assets not involved in its core business.

The business plan of further development of CJSC Neva Kabel, calling for higher outputs and maintaining the high quality of its products, provided for additional investments of EUR 2.5 million. Due to large-scale investment challenges related to communication services that are faced by OJSC North-West Telecom, the Company was not prepared to contribute to the required increase of the CJSC Neva Kabel equity. The required investment will be provided by the new set of CJSC Neva Kabel shareholders.

North-West Telecom for its part intends to continue the mutually profitable cooperation with CJSC Neva Kabel as regards purchases of its cable products.