Shareholder structure and capital disclosures

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Disclosure in accordance with section 243a of the Austrian Business Enterprise Code (‘UGB’)

The shareholders’ agreement between Österreichische Industrieholding AG (‘ÖIAG’), América Móvil, S.A.B. de C.V. (‘América Móvil’) and Carso Telecom B.V. (‘Carso Telecom’) came into force on 27 June 2014 (see Note (29)). Under the terms of the shareholders’ agreement, the parties have undertaken to jointly pursue a long-term policy with regard to the management of Telekom Austria Aktiengesellschaft by exercising their voting rights on a concerted basis. The shareholders’ agreement also contains provisions on the joint exercise of voting rights in the committees of the company for the election of Supervisory Board and Management Board members and restrictions on the sale of shares. The Supervisory Board of the company consists of ten shareholder representatives, of which eight members are nominated by Carso Telecom and two by ÖIAG. ÖIAG has the right to appoint the Chairman of the Supervisory Board. Carso Telecom has the right to appoint the Deputy Chairman. The Management Board of the company consists of three members. Two members are nominated by Carso Telecom, while one member of the Management Board, namely the Chief Executive Officer (CEO), is nominated by ÖIAG. The Extraordinary General Meeting on 14 August 2014 also amended the Articles of Association to state that, as long as the Republic of Austria directly or indirectly holds at least 25% plus one share of the share capital of the company, resolutions on capital increases and the issue of instruments containing a conversion right or a conversion obligation for shares of the company and amendments to the provisions of the Articles of Association relating to capital increases and such instruments shall require a majority of at least three quarters of the share capital represented at the vote on the resolution.

ÖIAG and Carso Telecom have agreed that at least 24% of the shares of the company should be in free float while the shareholders’ agreement is in place. This minimum free float requirement is based on ÖIAG’s maximum equity interest of 25% plus one share. If ÖIAG holds more than 25% plus one share of the share capital of the company, the minimum free float requirement decreases accordingly so that América Móvil can retain an equity interest in the company of 51%. If the number of shares in free float falls below the minimum while the shareholders’ agreement is in place, (i) Carso Telecom undertakes to sell shares within the next 24 months and (ii) América Móvil undertakes to ensure that neither it nor its subsidiaries purchase any additional shares until the minimum free float requirement is restored.

As long as ÖIAG holds 25% plus one share or more of the share capital of Telekom Austria AG, ÖIAG shall have the following rights of codetermination in accordance with the voting rights agreement: the right to veto capital increases of Telekom Austria AG and its subsidiaries, the issue of certain convertible instruments, the appointment of the auditor of the Financial Statements, related party transactions, the relocation of the registered office of the company and material business functions, including research and development, the disposal of the company’s core business, and changes to the name of Telekom Austria AG and the brands of Telekom Austria AG, among other things. ÖIAG shall also be granted the blocking minority rights accruing by law to a minority shareholder with an equity interest of 25% plus one share. ÖIAG’s veto rights in connection with capital increases and the issue of certain convertible instruments are also set out in the Articles of Association of the company. If ÖIAG’s equity interest falls below 20% but remains above 10%, ÖIAG shall retain certain veto rights. The voting rights agreement shall expire automatically if the equity interest held by one of the parties falls below 10%.

With respect to the loans still outstanding as of 31 December 2014 which are designated to the ‘change of control’ clauses, the lenders did not demand early repayment in the course of the financial year 2014.

At the end of 2014, a total of 59.70% or 396,705,196 shares of the Telekom Austria AG were directly or indirectly held by América Móvil. The Republic of Austria holds 28.42% via ÖIAG, while the remaining 11.88% is attributable to free float. 0.1% or 0.4 million of these shares were held by the company itself. América Móvil has more than doubled its equity interest compared with the figure of 23.67% at the end of the previous year. On 23 April 2014, América Móvil and ÖIAG entered into the aforementioned shareholders’ agreement that triggered a public takeover offer. During the acceptance and additional acceptance period from 15 May 2014 to 16 October 2014, a total of 142,414,783 shares (32.15%) of the Telekom Austria AG were sold to América Móvil for a price of EUR 7.15 per share. The first capital increase in the history of the Telekom Austria AG was undertaken in November 2014. Between 10 and 24 November 2014, a total of 221,500,000 new shares were offered for subscription at a price of EUR 4.57 per share. Around 99.7% of the new shares were placed, with the remaining 0.3% subscribed by Deutsche Bank at a price of EUR 5.26 per share. As a result, the number of shares in circulation increased to 664,500,000.

The voting rights attached to shares held by Telekom Austria AG employees, which are held in a collective custody account, are exercised by a custodian (notary).

The main changes in the shareholder structure were as follows:

On 14 January 2014, Carso Telecom, in which América Móvil indirectly holds a controlling interest, concluded a conditional share purchase agreement with Inmobiliaria Carso, S.A. de C.V and Control Empresarial de Capitales, S.A. de C.V for a total of 13,901,000 Telekom Austria AG shares, corresponding to 3.14% of the share capital. When the transaction comes into force, Carso Telecom holds a total of 110,841,174 ordinary shares of Telekom Austria AG, corresponding to 25.0206% of the voting rights in Telekom Austria AG, and therefore exceeds the threshold of 25% of the voting rights of the issuer; América Móvil holds directly (section 91 (1) of the Austrian Stock Exchange Act (‘BörseG’)) and indirectly (section 92 (Z 4) of the Austrian Stock Exchange Act) a total of 118,776,874 ordinary shares of Telekom Austria AG, corresponding to 26.8119% of the voting rights in Telekom Austria AG, and therefore exceeds the threshold of 25% of the voting rights of the issuer.

Following this transaction, Carso Telecom holds a total of 110,841,174 ordinary shares of Telekom Austria AG as of 13 March 2014, corresponding to 25.0206% of the voting rights in Telekom Austria AG, and therefore exceeds the threshold of 25% of the voting rights of the issuer; América Móvil directly (section 91 (1) of the Austrian Stock Exchange Act) and indirectly (section 92 (Z 4) of the Austrian Stock Exchange Act) holds a total of 118,776,874 ordinary shares of Telekom Austria AG, corresponding to 26.8119% of the voting rights in Telekom Austria AG, and therefore exceeds the threshold of 25% of the voting rights of the issuer.

On 23 April 2014, América Móvil announced that it had concluded a shareholders’ agreement with ÖIAG concerning its equity interest in Telekom Austria AG via its wholly-owned subsidiary Carso Telecom.

On 25 April 2014, América Móvil and ÖIAG announced that the conditional shareholders’ agreement in accordance with sections 91, 91a and 92 (Z 1) of the Austrian Stock Exchange Act encompassed the voting rights for 244,694,609 shares of Telekom Austria AG, corresponding to an equity interest of 55.2358%. When the shareholders’ agreement went into effect, América Móvil and ÖIAG exceeded the thresholds of 30%, 35%, 40%, 45% and 50% of the votes in Telekom Austria AG in accordance with section 92 (Z 1) in conjunction with section 91 of the Austrian Stock Exchange Act.

On 30 June 2014, Carso Telecom announced that, following the conclusion of a conditional shareholders’ agreement with ÖIAG on 15 May 2014, it had submitted a voluntary public takeover offer with the aim of effecting a change of control in accordance with section 25a of the Austrian Takeover Act (‘ÜbG’). The takeover offer to the shareholders of Telekom Austria AG related to the acquisition of all no-par value shares not already held by the bidder, the América Móvil Group, ÖIAG or Telekom Austria AG. The offer price was EUR 7.15 ex dividend 2013 per no-par value share of Telekom Austria AG. The offer could have been accepted between 15 May 2014 and 10 July 2014, 5:00 p.m, Vienna time.

On 30 June 2014, Carso Telecom and ÖIAG announced that all of the conditions precedent of the shareholders’ agreement had been met by 27 June 2014. The shareholders’ agreement came into force with the fulfilment of all of the conditions precedent. In accordance with sections 91, 91a and 92 (Z 1) of the Austrian Stock Exchange Act, the shareholders’ agreement encompassed the voting rights for 246,218,158 shares of Telekom Austria AG, corresponding to an equity interest of 55.58% at this point in time.

On 15 July 2014, América Móvil and ÖIAG announced that Carso Telecom had received 103,978,115 shares during the acceptance period of the public takeover offer for all of the shares of Telekom Austria AG, corresponding to approximately 23.47% of the voting rights in Telekom Austria AG. In accordance with sections 91, 91a and 92 (Z 1) of the Austrian Stock Exchange Act, the shareholders’ agreement encompassed the voting rights for 351,002,957 shares of Telekom Austria AG, corresponding to an equity interest of 79.23% at this point in time. The acceptance period ended on 10 July 2014. Following the payment of the purchase price and the transfer of the shares, América Móvil held directly and indirectly 225,085,222 shares, corresponding to around 50.80% of the share capital of Telekom Austria AG. Under the conditions of the offer document, every shareholder who did not accept the offer was offered a sell-out period of an additional three months.

On 18 July 2014, América Móvil and ÖIAG submitted the following notification: The 125,917,735 ordinary shares of Telekom Austria AG held by ÖIAG corresponding to 28.4239% of the voting rights of the issuer, are attributable in accordance with section 92 of the Austrian Stock Exchange Act. Furthermore, a total of 103,978,115 ordinary shares of Telekom Austria AG were delivered under the terms of the takeover offer by Carso Telecom up until 14 July 2014, corresponding to 23.4713% of the voting rights in Telekom Austria AG. Directly and indirectly and taking into account the shares held by ÖIAG and the delivered shares, América Móvil therefore held a total of 351,002,957 ordinary shares of Telekom Austria AG, corresponding to 79.2332% of the voting rights in Telekom Austria AG.

On 21 October 2014, América Móvil announced that its subsidiary Carso Telecom had received 38,436,668 shares during the additional acceptance period of the public takeover offer for all of the shares of Telekom Austria AG, corresponding to approximately 8.68% of the voting rights in Telekom Austria AG. The additional acceptance period ended on 16 October 2014.

On 21 October 2014, América Móvil announced that, following the purchase of additional ordinary shares of Telekom Austria AG by Carso Telecom on the OTC market and the settlement of the shares acquired during the additional acceptance period in accordance with section 19 (3) of the Austrian Takeover Act, América Móvil held 264,470,131 ordinary shares of Telekom Austria AG directly and indirectly via Carso Telecom, corresponding to 59.6998% of the voting rights in Telekom Austria AG. The 125,917,735 ordinary shares of Telekom Austria AG held by ÖIAG, corresponding to 28.4239% of the voting rights of Telekom Austria AG, are attributable in accordance with section 92 of the Austrian Stock Exchange Act and section 20 of the Austrian Banking Act. Directly and indirectly and taking into account the ordinary shares held by ÖIAG, América Móvil therefore held a total of 390,387,866 ordinary shares of Telekom Austria AG, corresponding to 88.1237% of the voting rights in Telekom Austria AG.

On 7 November 2014, the Management Board of Telekom Austria AG, with the approval of the Supervisory Board of Telekom Austria AG, resolved to implement a capital increase with the aim of generating net proceeds of up to EUR 1 bn from the issue of up to 221,500,000 new no-par value shares with voting rights.

On 24 November 2014, the Telekom Austria AG announced the end of the subscription period and the completion of the capital increase announced on 7 November 2014. As a result, the number of shares of the Telekom Austria AG increased by 221.5 million, from 443.0 million to 664.5 million. The net proceeds from the transaction amounted to EUR 996.6 mn.

On 28 November 2014, the Telekom Austria AG announced that the share capital of Telekom Austria AG had increased from EUR 966,183,000 to EUR 1,449,274,500 as a result of the capital increase, which was entered in the commercial register on 27 November 2014. At the same time, the number of no-par value shares in circulation increased from 443,000,000 to 664,500,000.

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