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JSFC Sistema (SSA)

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Tuesday 23 October, 2007

JSFC Sistema


JSFC Sistema


Sistema (LSE:SSA), the largest private sector consumer services company in
Russia and the CIS, today announced that it has signed a share purchase
agreement for the acquisition of an additional 41% stake in Shyam Telelink Ltd.,
an Indian telecommunications operator, and a call option agreement which gives
Sistema the right to increase its stake in Shyam Telelink Ltd. from 51% up to a
maximum of 74%, subject to receiving an approval from the Foreign Investment
Promotion Board (FIPB) of India.

Upon acquisition of the additional 41% stake, the overall purchase price is
expected to reach US$ 58.1 million. Thereafter, Sistema will have the right to
purchase an additional 23% stake in Shyam Telelink Ltd. during 20 months
following such an acquisition and pursuant to the call option agreement at the
price which will be based on the fair market value of the company at the time of
such additional purchase. If such call option is not exercised within 30 months,
Sistema will be obligated to pay to the sellers an amount equal to 11.5% of the
increase in the fair market value of the company.

In addition, Sistema signed a put option agreement for 51% stake in Shyam
Telelink Ltd. for a total price not less than the purchase price of the 51%
stake. This put option is exercisable within 12 months following the acquisition
of 10% stake in Shyam Telelink Ltd.

The company applied to appropriate state authorities for obtaining unified
telecommunication licenses in order to provide fixed-line and cellular services
in 21 states of India. The company intends to start its network expansion if
such licenses are granted.

Sistema's acquisition of additional ownership stakes in Shyam Telelink Ltd. is
subject to a number of conditions, including the execution of additional
documents and obtaining various approvals.

For further information, please visit or contact:

Sistema Public Relations    Shared Value Limited
Kirill Semenov              Larisa Kogut-Millings
Tel: +7 495 730 7188        Tel. +44 (0) 20 7321 5037

Sistema is the largest private sector consumer services company in Russia and
the CIS, with over 80 million customers. Sistema develops and manages
market-leading businesses in selected service-based industries, including
telecommunications, technology, insurance, banking, real estate, retail and
media. Founded in 1993, the company reported revenues of US$ 5.9 billion for the
first half of 2007, and total assets of US$ 22.5 billion as at June 30, 2007.
Sistema's shares are listed under the symbol 'SSA' on the London Stock Exchange,
under the symbol 'AFKS' on the Russian Trading System (RTS), and under the
symbol 'SIST' on the Moscow Stock Exchange (MSE) and under the symbol 'AFKS' on
the Moscow Interbank Currency Exchange (MICEX).

Shyam Telelink Ltd. obtained a unified license to provide fixed-line and
cellular services to corporate and residential customers in the Indian state of
Rajasthan with a population of approximately 62 million people. The company also
controls 100% of the local internet service provider Shyam Internet Ltd. Shyam
Telelink Ltd. owns a developed telecommunications infrastructure which includes
4,000 kilometres of fiber-optic lines.

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.

Information contained in this announcement does not constitute a public offer or
an advertisement of securities in Russia, is not an offer, or an invitation to
make offers, to purchase any securities in Russia. The reverse convertible
certificates have not been and will not be registered in Russia and are not
intended for 'placement' or 'public circulation' in Russia.