Re Agreement

RNS Number:7037Q
Koninklijke KPN NV
30 January 2002


KPN acquires full control of E- Plus 

The Hague/Atlanta-Royal KPN N.V. (AEX: KPN) and BellSouth (NYSE: BLS) today have
signed a definitive agreement restructuring their relationship. Under the new
agreement, BellSouth exchanges its 22.51% stake in the German mobile operator E-
Plus into 234.7 million KPN ordinary shares. After conversion this represents
9.42% of KPN's 2,491 million outstanding shares. As part of the transaction
BellSouth has surrendered its existing warrant on KPN shares, its rights with
regard to KPN Mobile and its contingent rights pertaining to KPNQwest. 

After closing KPN will have full control of E-Plus. The closing is anticipated
to occur in 2Q02 after EU, stock exchange and other regulatory filings have been
completed and necessary approvals obtained. The Dutch State, as holder of a
special share, has approved the issuance of new shares to BellSouth. 

Currently KPN has drawn Euro 484 million under a loan facility provided by
BellSouth. This amount is being repaid today. Upon closing KPN will assume
approx. Euro 2.1 billion BellSouth shareholder loans currently extended to E-
Plus by drawing down on the subordinated loan facility extended to KPN by
BellSouth. The two parties have agreed on new terms for that loan facility,
providing for a cap at the level of BellSouth's previous shareholder loans to E-
Plus. With an interest rate fixed at Euribor plus 175 bps the new terms also
include an accelerated amortization schedule: Euro 516 million to be repaid in
December 2002, Euro 500 million in October 2003 and approx. Euro 1.1 billion on
1 March 2004. 

Ad Scheepbouwer, CEO of Royal KPN said: "BellSouth has been an important partner
for us and has been a major contributor to the development of E-Plus. This
agreement marks another important milestone in the execution of KPN's new
strategy focused on core assets in core countries. The reduction of the
complexity of our partnerships will create more flexibility and transparency
which is in the best interest of the parties involved" 

As previously disclosed BellSouth is not subject to a lock-up with a
shareholding less than 10%. BellSouth and KPN agreed to cooperate closely and in
the best interest of both companies' shareholders in the event that BellSouth at
some point in the future wishes to dispose of its holdings in KPN. 

The transaction will lead to a change in the shareholding structure of E-Plus.
As of closing Royal KPN N.V. will hold 22.51% direct and KPN Mobile will hold
direct 77.49%. As a result of the consolidation of 100% of E-Plus, KPN's net
consolidated debt will increase by approx. Euro 930 million, based on Q3 2001
figures. The effect on revenues (Jan-Sep 2001) would have been an increase of
Euro 377 million (128 million in Q3 2001) and an increase of Euro 60 million (38
million in Q3 2001))on Ebitda. 

About E-Plus 

E-Plus was founded in 1993 and launched its DCS 1800 network in 1994. Royal KPN
N.V. announced the acquisition of a 77.49% stake in Germany's third largest
mobile operator in December 1999. BellSouth acquired options to convert its
22.51% stake into KPN Mobile or into Royal KPN NV. The customer base of E-Plus
increased from 3.5 million by the end of 1999 to 7.5 million by the end of 2001.
E-Plus is planning to launch i-mode, the Japanese mobile data product developed
by NTT DoCoMo in spring 2002. NTT DoCoMo has meanwhile over 30 million i-mode
clients. 
 
About Royal KPN and KPN Mobile  

KPN is a telecommunications company offering a wide range of high quality and
innovative telecommunications services for both the private and business market.
Its core business activities are: mobile communications; fixed network services
and Internet services and IP/Data services. KPN focuses on the Benelux-countries
and Germany. 
KPN Mobile N.V. is an 85%-owned subsidiary of Royal KPN N.V. NTT
DoCoMo Inc., KPN's strategic partner, owns the remaining 15%. KPN Mobile is
currently active with its own network operators in Germany (E-Plus), the
Netherlands and Belgium (KPN Orange), where more than 8,000 employees serve some
13.7 million customers as of the end of December 2001.  

About BellSouth Corporation  

BellSouth Corporation is a Fortune 100 communications services company
headquartered in Atlanta, GA, serving more than 45 million customers in the
United States and 15 other countries, 

Consistently recognized for customer satisfaction, BellSouth provides a full
array of broadband data and e-commerce solutions to business customers,
including Web hosting and other Internet services. In the residential market,
BellSouth offers DSL high-speed Internet access, advanced voice features and
other services. BellSouth also provides online and directory advertising
services, including BellSouth(R) Real PagesSM.com. 

BellSouth owns 40 percent of Cingular Wireless, the nation's second largest
wireless company, which provides innovative wireless data and voice services. 

Safe harbour 
Certain statements contained in this presentation constitute forward-looking
statements. These statements may include, without limitation, statements
concerning future results of operations, the impact of regulatory initiatives on
KPN's operations, KPN's and its joint ventures share of new and existing
markets, general industry and macro-economic trends and KPN's performance
relative thereto, and statements preceded by, followed by or including the words
"believes", "expects", "anticipates" or similar expressions. These forward-
looking statements rely on a number of assumptions concerning future events and
are subject to uncertainties, and other factors, many of which are outside KPN's
control, that could cause actual results to differ materially from such
statements). A number of these factors are described (not exhaustively) in KPN's
Annual Report on Form 20-F for the year ended 31 December 2000. 

Note to the editor (not for publication)  

A press conference call will be held at 10:00 o'clock, and can be attended via
www.kpn.com 
Dial in-number: [phone] 

For further information, please call  

KPN Press Office: 
Marinus Potman ([phone] 
[e-mail] 

KPN Investor Relations: 
Gerbrand Nijman ([phone]  
g.l.h,[e-mail]

BellSouth Media Relations: 
Jeff Battcher [phone] 
[e-mail] 

BellSouth Investor Relations: 
Greg Peterson [phone] 
[e-mail] 
 
Highlights  
 
• KPN acquires the remaining 22.51% statue in E-Plus in exchange for 234.7mn 
  KPN shares thus achieving full control 

• After this transaction BellSouth has surrendered: 

  • its existing warrant on KPN shares 
  • all rights with regard to KPN Mobile 
  • rights under an option agreement pertaining to KPNQwest 

  • A euro 484mn loan from BellSouth to KPN is being repaid today 

  • KPN will assume euro 2.1 bn BellSouth shareholder loans extended to E-Plus
    via subordinated BellSouth facility 

  • KPN has agreed on an accelerated amortization schedule 

    • euro 516mn to be repaid in Dec 2002, euro 500mn in Oct 2003 and approx. 
      euro 1.1bn in March 2004 

  • KPN's net consolidated debt will increase by approx. euro 930mn, based on 
    Q3 '01 

  • Revenues Q3'01 YTD would increase by euro 377mn and EBITDA by euro 60mn 

                                                                                                                      
 
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