SSA: JSFC Sistema: Statement re SISTEMA SIGNS NON-BINDING INDICATIVE OFFER WITH MTS TO INVEST IN MTS-BANK

  SSA: JSFC Sistema: Statement re SISTEMA SIGNS NON-BINDING INDICATIVE OFFER
  WITH MTS TO INVEST IN MTS-BANK

UK Regulatory Announcement

MOSCOW

FOR IMMEDIATE RELEASE October 25, 2012

             SISTEMA SIGNS NON-BINDING INDICATIVE OFFER WITH MTS

                            TO INVEST IN MTS-BANK

Moscow, Russia – October 25, 2012 – Sistema JSFC (“Sistema” or the “Company”)
(LSE: SSA), the largest publicly-traded diversified holding company in Russia
and the CIS, today announces that it has signed a non-binding indicative offer
with Mobile TeleSystems OJSC (“MTS”) and MTS Bank OJSC (“MTS Bank”) regarding
the issuance of up to 25.095% stake in MTS Bank to MTS.

Under the terms of the indicative offer, MTS would acquire up to 25.095% stake
in MTS Bank through an additional share issue by MTS Bank for up to RUB 5.09
billion. The proceeds from the transaction will be added to MTS Bank’s charter
capital. Once the transaction is completed, MTS will become the second largest
shareholder in MTS Bank, while Sistema’s direct stake in MTS Bank will be
65.3%.

The indicative offer is not legally binding. The transaction is subject to
corporate approvals by Sistema and MTS, regulatory approvals by the Federal
Antimonopoly Service of Russia and the Central Bank of Russia, satisfactory
conclusion of due diligence, and execution of binding documentation. The
additional share issue is also subject to approval by an Extraordinary General
Meeting of MTS Bank Shareholders.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented:
“The acquisition of a stake in MTS Bank by MTS will unlock synergies between
financial and mobile services. The consumer finance sector is expected to see
significant growth over the coming years and this partnership positions both
MTS and MTS Bank to benefit from this opportunity”.

                                     ***

For further information, please visit www.sistema.com or contact:

Investor Relations        Public Relations

Evgeniy Chuikov           Vsevolod Sementsov
                        
Tel.: +7 (495) 692 1100   Tel.:+7 (495) 730 1705

ir@sistema.ru             pr@sistema.ru

Sistema is the largest publicly-traded diversified holding company in Russia
and the CIS, which invests in and is a major shareholder of companies serving
over 100 million customers in the sectors of telecommunications, high
technology, oil and energy, radars and aerospace, banking, retail, mass-media,
tourism and healthcare services. Founded in 1993, the company reported
revenues of US$ 8.1 billion for the second quarter of 2012, and total assets
of US$ 43.6 billion as at June 30, 2012. Sistema’s global depository receipts
are listed under the symbol “SSA” on the London Stock Exchange. Sistema’s
ordinary shares are listed under the symbol “AFKS” on the MICEX-RTS Stock
Exchange, and under the symbol “SIST” on the Moscow Stock Exchange (MSE).
Sistema was ranked number 315 in the 2011 edition of the Fortune Global 500
list. Website: www.sistema.com

The Company is not an investment company, and is not and will not be
registered as such, under the U.S. Investment Company Act of 1940.

Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Sistema. You can identify forward looking statements by terms
such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,”
“could,” “may” or “might” the negative of such terms or other similar
expressions. We wish to caution you that these statements are only predictions
and that actual events or results may differ materially. We do not intend to
update these statements to reflect events and circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. Many
factors could cause the actual results to differ materially from those
contained in our projections or forward-looking statements, including, among
others, general economic conditions, our competitive environment, risks
associated with operating in Russia, rapid technological and market change in
our industries, as well as many other risks specifically related to Sistema
and its operations.

This document does not constitute or form part of any offer or invitation to
sell or issue, or any solicitation of any offer to purchase or subscribe for,
any shares or other securities of JSFC Sistema and/or any of its subsidiaries
and affiliated companies, nor shall any part of it nor the fact of its
distribution form part of or be relied on in connection with any contract or
investment decision relating thereto, nor does it constitute a recommendation
regarding the shares or securities of JSFC Sistema and/or any of its
subsidiaries and affiliated companies.

Contact:

JSFC Sistema
 
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