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Bolivarian Republic of Venezuela Announces Intention to Offer to Purchase Remaining American Depositary Shares and Class D Shares of Compania Anonima Nacional Telefonos de Venezuela (CANTV)

Posted on: Wednesday, 18 February 2009, 18:08 CST

CARACAS, Venezuela, Feb. 18 /PRNewswire/ -- The Bolivarian Republic of Venezuela (the "Republic"), through the Ministry of the Popular Power for Telecommunications and Information Technology, announced today that it intends to commence its previously announced offer to acquire the outstanding Class D Common Shares ("Class D Shares") and American Depositary Shares, each representing 7 Class D Common Shares ("ADSs"), of Compania Anonima Nacional Telefonos de Venezuela (CANTV) ("CANTV") in approximately 30 days. The offer will be conducted as two separate, but concurrent, tender offers to purchase (i) in Venezuela, any and all outstanding Class D Shares of CANTV not already owned by the Republic on the date the offers commence at a price, payable in Bolivars, of the equivalent of US$1.61 per share (being the US$11.27 per ADS price divided by seven to reflect that each ADS represents seven shares), calculated at the official exchange rate in the Republic for the sale of U.S. dollars by the Venezuelan Central Bank, Banco Central de Venezuela, in effect on the date on which the sale and purchase transactions in the offer for the shares are completed in a special session of the Caracas Stock Exchange, and (ii) in the United States, any and all outstanding ADSs not already owned by the Republic on the date the offers commence at a price, payable in U.S. dollars, of US$11.27 per ADS, the prices for the Class D shares and the ADSs being equivalent to the price established in the transaction in which the Republic purchased ADSs from Renaissance Technologies LLC in April 2008. The official exchange rate in the Republic for the sale of U.S. dollars by the Venezuelan Central Bank, Banco Central de Venezuela, is currently Bs.2.15 per US$ 1.00.

Only Class D shares may be sold in the offer in Venezuela, and only ADSs may be sold in the offer in the United States. Holders of CANTV's Class C Shares will be able to participate in the offer by converting their Class C Shares into Class D Shares in accordance with the procedure established in the Issuer's By-laws. The tender offers are expected to commence in March 2009, and will be subject to customary conditions.

The Republic also announced that it has entered into an agreement with The Bank of New York Mellon, as depositary (the "Depositary") under the Amended and Restated Deposit Agreement, dated September 10, 2000, under which CANTV's American Depositary Shares are issued (the "Deposit Agreement") pursuant to which the Depositary has agreed, subject to certain amendments to and the termination of the Deposit Agreement described below, to tender into the offer, in the form of ADSs, any and all Class D shares that remain deposited in the ADS facility following the termination of the Deposit Agreement.

Separately, CANTV announced today that it has instructed the Depositary to terminate the Deposit Agreement, and that it and the Depositary have agreed to certain proposed amendments to the Deposit Agreement that would permit the Depositary to sell Class D shares remaining deposited in the ADSs facility following its termination commencing immediately upon termination of the Deposit Agreement and in the form of ADSs. The amendment and termination of the Deposit Agreement will become effective contemporaneously with (but prior to) the expiration of the proposed tender offers by the Republic, but not prior to April 18, 2009 (which is 60 days after the date of the Depositary's notice of the proposed amendment and termination).

Notice to Investors

This press release is not an offer to purchase or the solicitation of an offer to sell any securities. The offers referred to in this press release have not yet commenced. The solicitation and the offer to buy the Class D shares and the ADSs will be made pursuant to offers to purchase, related letters of transmittal and related materials that the Republic will distribute when it commences the offers. When available, those documents will contain important information that investors should read and consider carefully before any decision is made with respect to the offers.

CONTACT: Jeruss Arocha Ministerio del Poder Popular para las Telecomunicaciones y la Informatica Tel: (0426)518-19-13

SOURCE The Ministry of the Popular Power for Telecommunications and Information Technology

Source: PR Newswire

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