PeterStar’s Advanced Repayment of RUR100 million to Sberbank and 95% Reduction of the Principle Amount of the Debt

PeterStar, a leader of the market of telecommunication services in the Northwest Region, being part of the Synterra Group of Companies, announces an advanced repayment of its liabilities in the amount of RUR100 million under the credit line provided by OAO Sberbank.

This payment became one more advance tranche PeterStar made to repay the final amount under the credit attracted in June 2007 for a three-year term. The payment made it possible for the carrier to save RUR13 million on the interest to be due in 2010. At the expense of the advance payment, by the due date of full credit repayment PeterStar will have altogether saved about RUR82 million.

It will be recalled that in June 2007 the Synterra Group of Companies attracted two ruble credits in Sberbank on equal security terms (for 66% of PeterStar and Synterra stores both) and a 9% interest rate (the current rate makes 11.5%). The credit for RUR4406 billion was given to Synterra for a period till October 2011. The amount of PeterStar credit amounted to RUR2,823 billion and was given for a period till October 2010.

It should be noted that the both companies always strictly adhered to the payment schedules set forth in the contracts, from time to time repaying their liabilities ahead of the schedules. Thus Synterra has already repaid the tranche relating to March 2010, while PeterStar has repaid 44% of the final tranche scheduled for June 2010. As a result, the outstanding indebtedness under these credits makes 5% for PeterStar and 44% for Synterra. It should be emphasized that the Sberbank credit is the main external debt of the PeterStar Group of Companies.

Said conservative financial policy of the Synterra Group of Companies, combined with the accounts receivable reduced and a sufficient free cash generated by its operating activities, has led to the Group’s total debt load to be reduced by 7% (for an amount exceeding RUR800 million), i.e. down to the level of RUR11,192 million.

In this case, as of the end of 2009 the Net Debt of the Synterra Group of Companies made RUR10,118 million.

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