GST Completes Financing for Tucson and Albuquerque Networks Future Investments by Tomen in GST Telecommunications

Business Wire, May 31, 1996

VANCOUVER, Washington--(BUSINESS WIRE)--May 31, 1996--GST Telecommunications (AMEX:GST) GST Telecommunications, Inc. (AMEX-GST) announced the completion of an agreement with Tomen America Inc., to provide US $16 million in debt financing to complete GST's projects in Tucson, Arizona and Albuquerque, New Mexico.

The companies have also agreed to terminate Tomen's right to acquire a 10 percent ownership in each Tomen financed GST project. This will enable GST to meet one of the preferred covenants of GST's high-yield offering completed in December 1995. In addition, GST has completed the purchase of Tomen's minority interest in GST's subsidiary, GST Pacific Lightwave, Inc. GST will now own 100 percent of all its operations.

In addition, Tomen has exercised its right to increase Tomen's interest in GST Telecommunications, Inc., by purchasing 250,000 shares of the company's common stock and warrants to purchase 125,000 shares for an aggregate purchase price of $2,700,000.

Tomen America Inc., a wholly-owned subsidiary of Tomen Corporation, Tokyo, Japan, is one of the world's leading general trading companies. For its fiscal year ended March 31, 1995, Tomen Corporation reported total revenues of approximately US $77.4 billion.

GST Telecommunications, Inc. currently operates networks in fourteen cities in the western United States, with particular emphasis on California and Hawaii, and currently is building networks in six additional cities. The company provides a range of integrated telecommunications products and services, through the development and operation of competitive access and other telecommunications networks.

GST's primary focus is customers located in Tier II and Tier III markets in the western United States and Hawaii. In addition, the company manufactures telecommunications switching equipment and provides network management and billing systems through its wholly-owned subsidiary National Applied Computer Technologies, Inc. of Orem, Utah.

CONTACT: GST Telecommunications, Inc.

Robert Blankstein, 800/667-4366

or

GST Telecommunications, Inc.

John Warta, 360/254-4700