Ad hoc / Announcements

01st November 2004

TELES: Tax-Free Income Payment 2004 of at Least 1€/share

As TELES is vastly overcapitalized und wants to pay an Income 2004 of at least the amount communicated by it earlier, its Management Board just decided a regular capital reduction of about 23 Mio€, requiring approval by an extraordinary general meeting shortly to be arranged. The so resulting „Income from Capital Reduction“ for the year 2004 shall be paid to the shareholders by at least 1€/share until the middle of 2005, even free of tax according to the actual and very well founded state of knowledge.

The 2004 net profit from operating activities shall be retained and distributed together with the 2005 profit within the first half of 2006, at the latest.

In explanation: As reported by TELES, its actual cash of above 47 Mio€ and its about 2 Mio own shares – it intends to place the latter with institutional investors at 16-18 €/share – are the reasons for being vastly overcapitalised: The Equity Ratio presently amounts to 60% resp. to about 80%, if adjusted by the cash non-effective liabilities from customer prepayments. Considering the expected funds from the intended sale of the above mentioned own shares the Equity Ratio would be even significantly higher.

Due to the facts that, TELES does not plan acquisitions but is expecting very fast organic growth, its operating activities are permanently generating positive Cash Flows and there are no financial risks, for the shareholders and the capital market the question arises, wherefore TELES would need this high and constantly increasing liquidity. As a matter of fact: It does not need it – at least the above payment of 23 Mio€ is imperative, in particular as its receipt by the shareholders is most likely free of tax. The anew expected overcapitalisation of TELES could then be cut back by the distribution of profits at the beginning of 2006, at the latest.

Prof. Sigram Schindler, CEO