Hungary’s Magyar Telecom unitholders approve reorganization request

New York, April 1 – Magyar Telecom BV and Matel Holdings Ltd. said they received the requested consents from holders of their 150,051,000 units made up of shares issued by Matel Holdings and notes issued by Magyar Telecom, according to a notice to unitholders.

A majority of unitholders voted in favor of the changes, the company said.

As announced on March 21, the group plans to reorganize its corporate structure and operating segments. Some aspects of the reorganization need the written consent of the holders of a majority of the company’s shares.

The record date was March 21, and the deadline for providing written consent or written objection was 10 a.m. ET on March 31.

The company was not offering a consent fee.

Reorganization

The first step of the reorganization is to demerge Invitel Tavkozlesi Zrt.

The group is active in four market segments organized in two business units: a residential unit that includes the group’s residential and small business segments and a corporate unit that includes the group’s business-to-business and wholesale segments. The residential unit is a regional triple-play operator, and the corporate unit is a telecommunication and IT services business.

Magyar Telecom plans to legally demerge Invitel Tavkozlesi, which will result in three separate legal entities remaining:

• The surviving Invitel Tavkozlesi (“ResCo”) will retain and continue to operate network, IT systems, other assets, contracts and employees relating to the residential unit;

• A newly created entity (“CorpCo”) will receive and operate network, IT systems, other assets, contracts and employees relating to the corporate unit of the group; and

• A newly created entity (“AdminCo”) will receive and operate assets and employees relating to the finance, legal, human resources and other central administrative functions.

The second step is to dissolve Dataneum Zrt. into CorpCo and liquidate Invitel International Holdings BV.

Dataneum, a wholly owned subsidiary of ResCo which will be dissolved into CorpCo, and Invitel International Holdings, a wholly owned subsidiary of ResCo, will be liquidated with no successor because it no longer serves a material purpose.

The tabulation agent is Lucid Issuer Services Ltd. (44 20 7704 0880 or invitel@lucid-is.com).

Based in Budapest, Magyar offers telecommunications services to residential and business customers.

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