VSNL Buys Primus IndiaVSNL Buys Primus India

MCLEAN, Va. -- PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL) announced today that it and related entities have entered into a Share Purchase Agreement ("SPA") with Videsh Sanchar Nigam Limited ("VSNL"), a leading international telecommunications company and member of the TATA Group, whereby VSNL will purchase 100% of the stock of Direct Internet Limited ("DIL"), whose wholly-owned subsidiary, Primus Telecommunications India Limited ("PTIL"), is primarily engaged in providing fixed broadband wireless internet services to enterprise and retail customers in India. PRIMUS owns approximately 85% of the stock of DIL through an indirect wholly-owned subsidiary. The remaining approximately 15% of the stock of DIL is owned by the manager of DIL and PTIL, who had founded the predecessor companies. The purchase consideration is approximately $16.7 million, as may be adjusted to reflect cash balances in DIL at closing. PRIMUS expects to receive approximately $14.4 million in net proceeds from the transaction, before any closing adjustments.

Consummation of the transaction is subject to a number of conditions precedent, which conditions are expected to be satisfied over the next few weeks. Under the SPA, PRIMUS agrees to certain non-compete provisions regarding the business of DIL and PTIL and is a party to the SPA for the purpose of guaranteeing indemnity obligations of the Primus subsidiary selling the stock of DIL.

PRIMUS Telecommunications Group, Incorporated (NASDAQ:PRTL) is an integrated communications services provider offering international and domestic voice, voice-over-Internet protocol (VOIP), Internet, wireless, data and hosting services to business and residential retail customers and other carriers located primarily in the United States, Canada, Australia, the United Kingdom and western Europe. PRIMUS provides services over its global network of owned and leased transmission facilities, including approximately 350 points-of-presence (POPs) throughout the world, ownership interests in undersea fiber optic cable systems, 16 carrier-grade international gateway and domestic switches, and a variety of operating relationships that allow it to deliver traffic worldwide. Founded in 1994, PRIMUS is based in McLean, Virginia.

Videsh Sanchar Nigam Ltd. (VSNL) (NYSE: VSL)