5th Aug 2009 16:15
Sistema (LSE:SSA), the largest diversified public financial corporation in Russia and the CIS, which invests in and is a major shareholder of large companies operating in different industries, today announced that its Board of Directors has agreed to the acquisition of Sistema's 50.91% stake in Comstar-UTS by Mobile TeleSystems ("MTS"), another subsidiary of Sistema, for US$ 1.272 billion* or US$ 5.98 per ordinary share** in cash.
Credit Suisse and Merrill Lynch acted as financial advisors to Sistema. Merrill Lynch also provided a fairness opinion to the Board of Directors of Sistema.
The Board of Directors has also set October 1, 2009 as the date for the Extraordinary General Meeting of Sistema's Shareholders ("EGM"), in order to vote on the proposed transaction. The Board of Directors' approval of the offer does not constitute a binding agreement to consummate the transaction, and is subject to approval by the EGM. The completion of the transaction, which is expected to take place at the end of October 2009, is also contingent upon the fulfillment of a number of conditions, including MTS obtaining the required funding.
Leonid Melamed, President and Chief Executive Officer of Sistema, commented: "This transaction is in line with our stated strategy which is focused on further development of our telecommunications assets portfolio and the creation of additional shareholder value in both telecommunications subsidiaries and Sistema itself, as well as increasing return on its invested capital. The deal will allow us to strengthen our leadership position in the Russian telecommunications sector and realise the synergies in both companies, whilst we optimise the ownership and management structures in our key telecom subsidiaries."
*As transactions between two Russian entities must be carried out in rubles, MTS will hedge the final amount due on completion of the transaction with 50% of the sale price pegged at 31.9349 rubles: dollar rate, while the balance will be calculated at the official rate of the Central Bank of Russia on the date of completion.
** 1 ordinary share is equal to 1 GDR (Global Depositary Receipt)
For further information, please visit www.sistema.com or contact:
| Sistema Investor Relations | Shared Value Limited | |||||||
| Pavel Kim | Larisa Kogut-Millings | |||||||
| Tel: +7 495 692 22 88 | Tel: +44 (0) 20 7321 5010 | |||||||
| ir@sistema.ru | sistema@sharedvalue.net |
Sistema is the largest public diversified financial corporation in Russia and the CIS, which manages companies serving over 100 million customers in the sectors of telecommunications, high-tech, oil and energy, radio and aerospace, banking, real estate, retail, mass-media, tourism and healthcare services. Founded in 1993, the company reported revenues of US$ 16.7 billion and US$ 2.8 billion for the full year 2008 and the first quarter of 2009 respectively, and total assets of US$ 27.1 billion as at March 31, 2009. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), under the symbol "AFKC" on the Moscow Interbank Currency Exchange (MICEX), 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.
Copyright Business Wire 2009
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