Flag Telecom Holdings Limited Announces Closing of Initial Public Offering (IPO) and Sale of 36.43 Million Shares, Including Exercise of Over-Allotment Option

Flag Telecom Holdings Limited Announces Closing of Initial Public Offering
(IPO) and Sale of 36.43 Million Shares, Including Exercise of Over-Allotment Option

18 February 2000

London, FLAG Telecom (Nasdaq: FTHL; LSE: FTL) announced today
the closing of the Company's initial public offering (IPO) and sale of 36.43
million shares, including the exercise of an option to acquire 4,752,000 of
the Company's common shares by the underwriters to cover over-
allotments.

The firm offering of 31.68 million shares in FLAG Telecom by both FLAG
Telecom and selling shareholders was priced at $24 per share on 11
February. Following the exercise of the over-allotment option, also at $24
per share, the number of shares offered by FLAG Telecom and selling
shareholders was 36.43 million. Salomon Smith Barney acted as Global
Co-ordinator and Bookrunner for the offering. Deutsche Banc Alex.
Brown, Goldman Sachs & Co., Morgan Stanley Dean Witter and Warburg
Dillon Read LLC acted as co-managers.

Of the 4,752,000 common shares subject to the over-allotment option,
1,584,000 were sold by the Company and 3,168,000 were sold by selling
shareholders.

The net proceeds to FLAG Telecom from the entire offering, after
commissions and discounts, is $637 million. The proceeds to the selling
shareholders of FLAG Telecom were $193 million.

FLAG Telecom also announced today that its wholly-owned subsidiary,
FLAG Limited, has amended and restated its bank credit agreement. As
indicated in FLAG Telecom's Registration Statement on Form F-1, FLAG
Telecom applied approximately $25 million of the proceeds from its Initial
Public Offering to repay amounts outstanding under the FLAG Limited
credit facility. A $150 million term loan facility and $10 million revolving
credit facility were jointly arranged by Barclays Capital and Dresdner
Kleinwort Benson.

FLAG (Fiberoptic Link Around the Globe) Telecom is a global carriers'
carrier that develops and offers a broad range of innovative
telecommunications products and services to licensed international
carriers, Internet Service Providers and other telecommunications
companies. The FLAG Telecom network is designed to meet the growing
demand for international communications services and provide carriers
with a world-class broadband superhighway. Today, the company has an
established customer base of over 90 international operators, including
17 of the top 20 international carriers based on traffic volume*.

* Telegeography

www.flagtelecom.com

Notes to Editor:

The FLAG Telecom network is currently comprised of:
(1) The FLAG Europe-Asia cable, the world's longest independent digital
fibreoptic undersea cable system, which spans what is considered the
most difficult route of any cable system in the world, and took 27
months and required approximately 4,000 permits to install. FLAG
Europe-Asia currently has 16 operational landing points in 13
countries on three continents and offers direct connectivity to over 75
percent of the world's population.

(2) Terrestrial connections between FLAG Telecom's landing stations in
the United Kingdom and Spain to the city centres of London and
Madrid, and intra-European connection from London to Paris,
Brussels, Frankfurt, Amsterdam, Berlin, Zurich, Milan and several
other major European metropolitan areas which FLAG Telecom has
acquired the right to obtain through contractual arrangements with
other facilities based bandwidth capacity providers.

(3) FLAG Atlantic-1, the company's latest venture now under
construction, which is designed to be the world's first multi-terabit/s
transoceanic dual cable system offering fully protected services
between Paris, London and New York. The system will be a triple-
ring, dual cable system, connecting the East Coast of the United
States, with nodes in the heart of New York to two landings in Europe
- one in Brittany, France and the other in Cornwall, UK, with city
nodes in Paris and London. Customers will be able to add traffic
either at the shore landing stations or the city nodes. The planned
three self-healing rings are designed to provide secure end to end
circuits to most of the major world business centres. FA-1 is expected
to enter commercial service in Q1 2001, and will connect to the FLAG
Europe-Asia cable system in Cornwall, UK. FA-1 is being built as
50:50 joint venture with GTS.

Statements contained in this Press Release which are not historical facts may be
forward-looking statements, as the term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially from
those currently anticipated due to a number of factors, which include, but are not
limited to: the Company's ability to achieve revenues from products and
services that are in the early stages of development or operation, the Company's
completion of FLAG Atlantic-1 within budget and on time, the Company's ability
to deploy sophisticated technologies on a global basis, the Company's ability to
upgrade and expand its network and respond to customer demands and industry
changes, regulatory enactments and changes, competition and pricing pressure,
rapid technological change, adverse foreign economic or political events and
other factors that are discussed in the Company's Registration Statement on
Form F-1 filed with the Securities and Exchange Commission.