GREECE’S OTE KEPT AT ‘HOLD’ BY CITIGROUP AFTER ARMENIAN EXIT

AFX International Focus
November 6, 2006 Monday 9:13 AM GMT

ATHENS (AFX) – Shares in Greek telecom incumbent Hellenic Telecomms
(OTE) were higher after Citigroup kept the stock at hold after
OTE’s announcement that it had agreed to sell its Armenian unit,
dealers said.

At 10.45 am OTE was up 0.7 pct to 20.94 eur, and the ASE general
index was 0.3 pct higher at 4,188.3 points.

OTE said late on Friday that it has reached an agreement to sell its
90 pct stake in Armentel for 342 mln eur to Vimpel Communications.

Citigroup said the deal makes sense because Armenia has always been a
tough market for OTE for political reasons and had a lack of synergies
with other assets, partly due to distance.

The broker noted that this was an opportunity for OTE to pay off some
debt. Assuming about a 5 pct tax on foreign capital gains, OTE should
net about 325 mln eur in the fourth quarter.

Citigroup said they now expect OTE will be busy with the integration
of mobile and tech retailer Germanos, union negotiations and broadband
roll-out. It might possibly expand in Serbia, where it already owns
20 pct of Telecom Serbia, the broker added.