Sistema to acquire 17.14% of SSTL

FOR IMMEDIATE RELEASE

Sistema to acquire 17.14% of SSTL from the Russian Federation

Moscow, Russia - June 27, 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 it has signed an agreement with the Russian Federation, represented by the Federal Agency for State Property Management, whereby the Company will acquire 17.14% of the shares of telecommunications operator Sistema Shyam TeleServices Limited ("SSTL"), a subsidiary of Sistema in India.

Under the agreement, payment for the shares will be made to the Russian federal budget in instalments over a period of five years as follows: 30% in 2016, 25% in 2017, and 15% in each of 2018, 2019 and 2020.

The Russian Federation acquired 17.14% of SSTL shares in March 2011, and simultaneously concluded an option agreement with Sistema to sell these shares back to the Company after a period of five years for the higher of US$ 777 million or the market value determined by an independent valuator.

***

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, agriculture, banking, retail, real estate, pharmaceuticals, 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.