Sistema sells 1.45% of MTS in the form of ADS

FOR IMMEDIATE RELEASE

Sistema sells 1.45% of MTS in the form of American Depositary Shares

Moscow, Russia - June 23, 2016 - Sistema JSFC ("Sistema" or "the Company") (LSE: SSA, MOEX: AFKS), a publicly-traded diversified holding company operating primarily in Russia and the CIS, announces that on 23 June 2016 its subsidiary, Sistema Finance S.A., sold 14,965,592 American Depositary Shares of PJSC MTS ("MTS"), representing 1.45% of MTS's share capital, to a non-affiliated buyer for a consideration of USD 123.5 million.* The transaction was executed in compliance with U.S. Securities and Exchange Commission Rule 144. Following this transaction, Sistema Group owns 50.01% of MTS's total share capital.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented: "MTS is a strategic asset for Sistema, we are confident in the outlook for growth of its market value, and we consider it fundamentally important that Sistema remains MTS's controlling owner. At the same time, this transaction will make an important contribution toward achieving Sistema's strategic objectives of further diversifying its portfolio, expanding its investments in new projects and optimising its capital structure."

*Net of commission

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

Sistema is a publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving approximately 150 million customers in the sectors of telecommunications, high technology, pulp and paper, banking, retail, tourism and healthcare services. Founded in 1993, the Company reported revenues of RUB 708.6 billion for 2015, and total assets of RUB 1.3 trillion as at 31 December 2015. 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 Moscow Exchange. 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. 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.