13th Nov 2008 12:00
SISTEMA SIGNS AGREEMENTS AIMED AT IMPROVING TRANSPARENCY AND CORPORATE GOVERNANCE IN BASHKIR OIL COMPANIES
Sistema (LSE:SSA), the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector, today announced that Sistema Invest, a subsidiary of Sistema, has signed a number of agreements with the majority shareholders of Bashkir Oil and Energy Group ("Group"). The Group includes ANK Bashneft JSC, Ufaorgsintez JSC, Bashkirnefteproduct JSC, Ufimsky NPZ JSC, Novoil JSC and Ufaneftekhim JSC.
According to the agreements, Sistema Invest will act as a management company in respect of the following companies Agidel-Invest LLC, Inzer-Invest LLC, Ural-Invest LLC and Yuryuzan-Invest LLC which own a majority stake in the Group.
Sistema, the majority shareholders and the management of the Group's companies will undertake a number of measures concerning corporate governance, including:
Improving levels of transparency through the implementation of common accounting standards and the standardization of business processes, the increase of disclosure around the Group's strategic decisions and the strengthening of communications between the Group's management and the investment community. Increasing the Group's production efficiency and optimising the cost structure. Each of the Group's companies will form a Management Board and include representatives from Sistema. Enhancing the overall attractiveness of the Group for investors by developing the corporate governance mechanisms and providing broader access to capital markets, both domestically and internationally. The agreements will increase the powers of the Boards of Directors of the Group's companies such as the approval of development strategies, investment programmes and budgets; the preliminary approval of transactions with a total value between 10% and 25% of each of the Group's companies' total assets. Furthermore, audit and finance and investment committees will be established at Board level. The representatives of Sistema Invest and Sistema will sit on the Boards of Directors of each company of the Group.***
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 | |
Note to editors:
Sistema became a minority shareholder of the Bashkir Oil and Energy Group in 2005. Sistema owns directly and through its subsidiary, Sistema Invest, between 25% and 29% of the voting shares in each of the six oil companies. The controlling stake in these companies (between 51% and 65%) belongs to Agidel-Invest LLC, Inzer-Invest LLC, Ural-Invest LLC and Yuryuzan-Invest LLC. The Bashkir Oil and Energy Group ranks eleventh by oil production in Russia and fourth by its reserves. The Group's revenues amounted to RUB 159 billion in 2007 according to RAS. The Group generated a net profit of RUB 26 billion in 2007.
Sistema is the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector and has over 100 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, banking, real estate, retail, media, tourism and healthcare. Founded in 1993, the company reported unaudited revenues of US$ 4.3 billion for the second quarter of 2008, and total assets of US$ 32.7 billion as at June 30, 2008. 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 2008
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