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JSFC Sistema (SSA)

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Friday 06 May, 2011

JSFC Sistema

Reorganisation of Sistema-Invest

Reorganisation of Sistema-Invest

JSFC Sistema

REORGANISATION OF SISTEMA-INVEST

Moscow, Russia – May 6, 2011 – JSFC Sistema (“Sistema” or the “Group”) (LSE:SSA), the largest diversified public financial corporation in Russia and the CIS, today announces the reorganisation of OJSC Sistema-Invest (“Sistema-Invest”), a subsidiary of Sistema, by merging into it CJSC Bashkir Integrated Energy Systems, CJSC UNKH-EnergoInvest, CJSC UNPZ-EnergoInvest and CJSC Novoil-EnergoInvest.

These companies were previously owned by the Bashkir Oil and Energy Group of companies, including ANK Bashneft, OJSC Ufimsky NPZ, OJSC Novoil and OJSC Ufaneftekhim. During the merger, shares of Bashkir Integrated Energy Systems, UNKH-EnergoInvest, UNPZ-EnergoInvest and Novoil-EnergoInvest were converted into Sistema-Invest treasury shares and additionally issued ordinary shares (in December 2010, Sistema-Invest acquired 10% of its own ordinary shares, and in March 2011, four additional issues of Sistema-Invest’s shares were registered by the Federal Service for Financial Markets of the Russian Federation).

Following the reorganisation, the share of the Bashkir Oil and Energy Group of companies in the charter capital of OJSC Sistema-Invest will increase to 49.5%. OJSC Sistema-Invest will hold the 50.17% of ordinary shares of OJSC Bashkirenergo (47.87% of its charter capital) previously held by CJSC Bashkir Integrated Energy Systems, CJSC UNKH-EnergoInvest, CJSC UNPZ-EnergoInvest and CJSC Novoil-EnergoInvest.

Bashkir Integrated Energy Systems, UNKH-EnergoInvest, UNPZ-EnergoInvest and Novoil-EnergoInvest ceased to exist following the merger with Sistema-Invest.

The transaction will be completed upon the registration of the reports on the newly-issued ordinary shares of Sistema-Invest by the Federal Service for Financial Markets (“FSFM”).

This transaction is carried out within the framework of the optimisation of Sistema’s asset structure, one of key elements of which is to divide its fuel and energy assets. The deal is in line with the Group’s strategy of developing of electric energy assets, as well as establishing a federal vertically integrated oil company based on ANK Bashneft.

Additional information:

Charter capital structure of OJSC Sistema-Invest before additional share issues:

  • JSFC Sistema – 65.0%
  • JSC ANK Bashneft – 25.0%
  • OJSC Sistema-Invest (treasury shares) – 10.0%

Charter capital structure of OJSC Sistema-Invest following the additional share issue:

  • JSFC Sistema – 50.5%
  • JSC ANK Bashneft – 26.7%
  • JSC Ufaneftekhim – 8.2%
  • JSC Ufimsky NPZ – 7.3%
  • JSC Novoil – 7.3%

Following the transaction, OJSC Sistema-Invest will own the following stakes in the Bashkir Oil and Energy Group’s companies:

  • JSC ANK Bashneft – 20.9% of charter capital (25.0% of ordinary shares)
  • JSC Ufaneftekhim – 18.2% of charter capital (22.4% of ordinary shares)
  • JSC Novoil – 25.6% of charter capital (28.2% of ordinary shares)
  • JSC Ufimsky NPZ – 22.5% of charter capital (25.5% of ordinary shares)
  • JSC Ufaorgsintez – 21.5% of charter capital (24.9% of ordinary shares)
  • JSC Bashkirnefteproduct – 17.2% of charter capital (18.6% of ordinary shares)
  • JSC Bashkirenergo – 47.87% of charter capital (50.17% of ordinary shares)

***

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 diversified public financial corporation 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$ 28.1 billion for the full year of 2010, and total assets of US$ 44.1 billion as at December 31, 2010. 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 RTS Stock Exchange, under the symbol “AFKC” on the MICEX Stock Exchange, and under the symbol “SIST” on the Moscow Stock Exchange (MSE).

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. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. 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.