Sistema to sell 0.80% of MTS per tender offer

Sistema to sell 0.80% of MTS shares in connection with tender offer

Moscow, Russia - 7 March 2017 - Sistema PJSFC ("Sistema" or "the Corporation") (LSE: SSA, MOEX: AFKS), a Russian public diversified holding company, announces that its subsidiary Sistema Finance S.A. will sell 16,038,892 ordinary shares of PJSC MTS ("MTS") to MTS subsidiary Stream Digital, LLC ("the Purchaser") in connection with the tender offer to purchase MTS shares ("the Tender Offer") being carried out by the Purchaser, for a total consideration of RUB 4,651,278,680.

The transaction will be completed at a price equal to the single sale price at which MTS's minority shareholders participate in the Tender Offer - RUB 290,00 per share.

As a result of the transaction, Sistema Group's effective stake in the share capital of MTS will remain unchanged at 50.03%.

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Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, timber processing, agriculture, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2015 reached RUB 708.6 billion; its total assets equalled RUB 1.3 trillion as of 31 December 2015. Sistema's global depositary receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.ru.

THIS ANNOUNCEMENT IS FOR GENERAL INFORMATION ONLY AND DOES NOT FORM PART OF ANY OFFER TO SELL, OR THE SOLICITATION OF ANY OFFER TO BUY, SECURITIES. THE DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. ANY PERSONS READING THIS ANNOUNCEMENT SHOULD INFORM THEMSELVES OF AND OBSERVE ANY SUCH RESTRICTIONS. THIS ANNOUNCEMENT CANNOT BE USED AS A BASIS FOR ANY INVESTMENT AGREEMENT OR DECISION.