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JSFC Sistema (SSA)

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Monday 12 March, 2012

JSFC Sistema

Statement re OJSC RTI LAUNCHES VOLUNTARY TENDER...

Statement re OJSC RTI LAUNCHES VOLUNTARY TENDER OFFER TO ACQUIRE UP TO 100% OF SITRONICS SHARES

JSFC Sistema

FOR IMMEDIATE RELEASE March 12, 2012

OJSC RTI LAUNCHES VOLUNTARY TENDER OFFER TO ACQUIRE UP TO 100% OF SITRONICS SHARES

Moscow, Russia – March 12, 2012 – Sistema JSFC (“Sistema”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announces that OJSC RTI (“RTI”), a subsidiary of Sistema (Sistema owns 84.6% and Bank of Moscow owns 15.4%) intends to make a Voluntary Tender Offer (“the Offer”) to acquire up to 36.926% of JSC SITRONICS’ common shares, representing all the shares that RTI does not already own, at a cash price of RUB 0.55 per common share of JSC SITRONICS (“SITRONICS). It is expected that SITRONICS will receive the documentation regarding the Offer tomorrow, March 13, 2012.

The Offer is in line with Sistema’s strategy to create one of the largest players in the Russian high-tech market, using RTI as a foundation, and is a significant step towards strengthening SITRONICS’ business, which is seen as an integral part of an emerging holding company, specialising in implementing both private and state contracts in a variety of sectors that are key to the Russian economy.

As a result of the purchase from Sistema in July 2011, RTI already currently owns 63.074% of SITRONICS and has consolidated SITRONICS in its financial results since the third quarter of 2011. The Offer includes all shares of SITRONICS, including the shares underlying SITRONICS Global Depositary Receipts (“GDRs”), which are not currently owned directly by RTI.

The Offer documentation was filed on February 24, 2012 with the Federal Service for Financial Markets (“FSFM”) and the period of statutory review has now expired.

The price of the Offer represents a 37.5% premium to the closing price of SITRONICS’ common shares on MICEX-RTS as of February 22, 2012 (the last trading day on MICEX-RTS before the day of filing the Offer with the FSFM) and a 66.7% premium to the three-month volume weighted average price as of February 22, 2012.

GDR holders will be entitled to participate in the Offer. Based on the USD/RUB exchange rate of 29.77 as of February 23, 2012, the implied price per GDR would be equivalent to USD 0.92. This represents a premium of 68.0% to the closing price of SITRONICS’ GDRs on the London Stock Exchange on February 23, 2012 (the last trading day on LSE before the day of filing the Offer with FSFM) and a 65.8% premium to the three-month volume weighted average price of the GDRs as of February 23, 2012. The sum payable per GDR in US dollars to GDR holders will be based on the USD/RUB exchange rate at the time the Depositary bank receives funds in accordance with the terms and conditions of the Depositary Agreement.

The Offer period commences from the day, when SITRONICS receives the Offer from RTI, and, if, as expected, SITRONICS receives the Offer on March 13, 2012, will remain open until the end of the day on May 22, 2012.

If as a result of the Offer RTI acquires over 95% of SITRONICS’ issued share capital, RTI intends to purchase all remaining shares from the holders of the remaining common stock of SITRONICS via a statutory squeeze-out under Russian law. Even if RTI is unable or decides not to initiate the squeeze-out of the remaining minority shareholders of SITRONICS, RTI intends to give serious consideration to delisting of SITRONICS’ securities from the Russian stock exchanges and the London Stock Exchange after completion of the Offer.

RTI may also consider a possibility of a reorganisation of SITRONICS in the future to achieve its full integration. At present RTI has not made any corporate decisions regarding such a reorganisation and reserves the right to determine the desirability, timing and procedure for any reorganisation of SITRONICS in the future. In case of any such decision, details and timing will be announced in due course.

Mikhail Shamolin, CEO and President of Sistema, commented: “RTI’s offer is an important strategic step in fully combining the company’s expertise in integrated security systems with SITRONICS’ information technologies, telecommunication solutions and microelectronics knowhow. This process will create a market leader in integrated system solutions and will realise significant operational synergies for both companies. We consider investments in the high tech sector to be very attractive and we believe the time has come to optimize the structure of Sistema’s high-tech assets and develop them further. This Offer is a key step towards creating an integrated company, one that will be an attractive partner for the State, for whom it will implement major high-tech orders. The new entity will become one of the leading providers of integrated and innovative engineering, information technology and microelectronics solutions, with a priority on developing our own high-tech products. We believe the Offer provides a good opportunity for SITRONICS’ shareholders to receive an attractive valuation for their holdings.”

Goldman Sachs (Russia) is acting as financial advisor to RTI and Cleary Gottlieb Steen & Hamilton is acting as legal advisor to RTI.

Rothschild is acting as financial advisor to SITRONICS’ Special Committee of Independent Board Directors and Debevoise & Plimpton LLP is acting as legal advisor to the Special Committee.

Documentation regarding the RTI Voluntary Tender Offer to acquire SITRONICS’ shares is available in Russian here: http://www.rtisystems.ru/oaorti/disclouserti/. Also, documentation regarding the Offer will be available at SITRONICS' web-site in English and Russian here: http://www.sitronics.com/investors/ and http://www.sitronics.ru/investors/.

***

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

Investor Relations

Evgeniy Chuikov

Tel.: +7 (495) 692 1100

ir@sistema.ru

 

Public Relations

Vsevolod Sementsov

Tel.:+7 (495) 730 1705

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$ 9.0 billion for the third quarter of 2011, and total assets of US$ 42.7 billion as at September 30, 2011. 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 342 in the 2010 edition of the Fortune Global 500 list. Website: www.sistema.com

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.