SSA: JSFC Sistema: Acquisition
UK Regulatory Announcement
SISTEMA ANNOUNCES AQUISITION OF SG-TRANS OJSC
Moscow, Russia – November 27, 2012 – Sistema JSFC (“Sistema”, the “Group” or
the “Company”) (LSE: SSA), the largest publicly-traded diversified holding
company in Russia and the CIS, today announces that it has signed an agreement
to acquire SG-trans OJSC (“SG-trans”), the Russian market’s largest
independent operator of specialised railcars for transportation of liquefied
petroleum gas (LPG). The signing of this agreement follows the Russian
Government’s approval of the tender to select a purchaser for SG-trans.
Sistema will pay a total cash consideration of RUB 22.77 billion for 100% of
the equity of SG-trans. The transaction is expected to be completed by the end
of November 2012.
This acquisition is in line with Sistema’s strategy to develop a strong
position in the transportation market. Sistema currently has exposure to a
number of transportation companies which own and operate rolling stock
comprising more than 19,500 railcars. In August 2012, Sistema’s subsidiary ANK
Bashneft JSC acquired 50% of the authorised capital of Financial Alliance LLC,
a professional railcar operator while in September 2012, Sistema-Venture
Capital JSC, a management company and a subsidiary of Sistema, assumed
operational management of TLC LLC (Transportno-Logisticheskaya Companiya), one
of Russia’s leading rail operators.
Sistema sees a significant value creation opportunity in SG-trans through
potential restructuring and optimisation efforts, adjustment to market rates
and the exploration of possible strategic options for SG-trans’ gas storage
and retail segment. Significant synergies will also be realised by combining
Sistema’s rail investments under one management team and Sistema and Bashneft
are considering options as to how this can be most efficiently achieved. Any
further announcements on the development of the Group’s rail strategy will be
made when appropriate.
Mikhail Shamolin, President and CEO of Sistema, commented: “One of our
strategic objectives is to create a leading industry player in the
transportation sector. We believe Sistema is well positioned to benefit from
this acquisition due to SG-trans’ leading position in the Russian LPG
transportation market and our now combined fleet of 34,500 railcars. The
Russian railroad transportation industry is undergoing significant reform
which will create a new competitive framework for freight rail transportation.
This deal offers high potential for growth and participation in strong market
fundamentals, as reflected by the industry’s track record for consistently
delivering average annual growth in turnover of 6-8% over the past few years.
This acquisition is an important step towards increasing our foot print
through further strategic opportunities.”
Conference call information
Sistema’s management will host an analyst conference call today at 9 am (New
York time) / 2 pm (London time) / 3 pm (CET) / 6 pm (Moscow Time) to present
and discuss the SG-trans acquisition.
The dial-in numbers for the conference call are:
UK/ International:+44 20 8515 2338
US: +1 480 629 9645
And quote the conference call title: “Acquisition of SG-trans”.
A replay of the conference call will be available on the Company’s website
www.sistema.com for 7 days after the event.
OJSC SG-trans is the largest independent operator in the Russian market,
providing transportation services of liquefied petroleum gas (LPG) in
specialised railcars. SG-trans business currently consists of two segments:
transportation, and gas storage and retail. In 2011, SG-trans generated
revenues of RUB 8.5 billion and net income of RUB 0.4 billion (according to
RAS). In 2011, the transportation segment accounted for approximately 60% of
SG-trans’ revenues (with the remaining 40% taken up by the gas segment).
The transportation segment of SG-Trans currently maintains a fleet of
approximately 15,000 railcars, including cars specially equipped to transport
LPG and other natural gas liquids. SG-trans works with a number of major
vertically integrated oil and gas companies in Russia. SG-Trans’
transportation segment also operates 9 maintenance and service stations for
LPG tank cars.
SG-Trans’ gas segment manages distribution, trade and storage of LPG.
Currently it operates 12 LPG terminals which accept, store and sell LPG
through wholesale distribution chains in Russia. It also operates a chain of
64 gas stations in 20 regions across Russia.
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
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$ 8.8 billion for the third quarter of 2012, and total assets of
US$ 46.3 billion as at September 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.
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