As part of the Subsidiary Business Reorganization Model, OJSC “North-West Telecom” terminated its participation in another two subsidiary companies, LLC “Cablevideo” and LLC “Pagetelecom”.

The participation of OJSC “North-West Telecom” in LLC “Cablevideo” was terminated on December 30, 2005 by the sale of a 51% stake with the nominal value of 25,500 rubles. The interest in the authorized capital of LLC “Cablevideo” was put on the balance sheet of OJSC “NWT” as the result of merger of OJSC “Svyaz” of Republic of Komi in October 2004. An analysis of the activity of Cablevideo showed the inexpediency of OJSC “NWT” interest in its authorized capital. The activity of LLC “Cablevideo” does not meet the communications services development strategy of OJSC “NWT”, the financial position is unstable and there are no outlooks for business growth.

The liquidation procedure of LLC “Pagetelecom”, Cherepovets being a 100% subsidiary organization of OJSC “NWT” was completed on December 29, 2005. LLC “Pagetelecom” provided personal radio call (paging) services, which according to the OJSC “NWT” marketing strategy is unpromising. Based on a business analysis, on October 26, 2004 the Board of Directors of OJSC “NWT” made the decision “On the voluntary liquidation of LLC “Pagetelecom”. After all measures necessary for the liquidation were taken (settlements with the creditors, works for collecting debts receivable, preparation of the liquidation balance sheet), on December 29, 2005 an entry was made in the Unified State Register of Legal Entities on the state registration of the legal entity in connection with its liquidation.

Commenting on these steps, NWT Deputy Director General Corporate Governance Nikolay Bredkov pointed out that “in the past year 2005 OJSC “NWT” did a great deal of work for the reorganization of subsidiary business, the main objective being to maintain and further develop the participation in strategic companies in keeping with the line of business and to liquidate such investments which do not meet the tasks of the communications market participant and are no longer topical. As of the beginning of the year, NWT had financial investments in 44 commercial organizations and participated in 12 noncommercial organizations “inherited” in the process of merger of North-West Region’s electrical communications operators finished in October 2004. During 2005, NWT terminated its participation in 22 companies and increased its interest in 3 companies conforming to its line of business. In 2006 we will proceed with work under the approved subsidiary business reorganization model with the purpose of implementing the strategy of improvement in the investment attractiveness of the company”.