REORGANISATION OF SISTEMA INVEST
Moscow, Russia – December 18, 2013 – Sistema JSFC ("Sistema" or the “Group”) (LSE: SSA), the largest publicly-traded diversified holding company in Russia and the CIS today announces that the Group’s Board of Directors (“Board”) has approved a restructuring plan for Sistema’s subsidiary - Sistema Invest CJSC1 (“Sistema Invest”).
The reorganisation proposes the separation of Sistema Invest’s assets, with 20.2% of Bashneft’s (“Bashneft” or the “Company”) issued ordinary shares2 being transferred from Sistema Invest to Bashneft Invest – a newly formed 100% Bashneft owned subsidiary. Bashneft Invest will also receive Sistema Invest’s payables due to Bashneft which amount to approximately RUB 36 billion.
Sistema Invest will retain 8.4% of Bashneft’s charter capital, 21.5% of Ufaorgsintez’ charter capital and 90.5% of Bashkirian Power Grid Company’s charter capital, and will become a 100% owned subsidiary of Sistema.
Following the reorganisation, Bashneft intends to cancel the ordinary shares transferred to Bashneft Invest. This in turn is expected to result in Sistema owning 70.5%3 of Bashneft’s charter capital (prior to the results of Bashneft's mandatory tender offer).
The completion of the reorganisation is subject to all necessary corporate approvals from Bashneft and Sistema Invest.
Mikhail Shamolin, CEO and President commented:
“The elimination of the cross ownership structure is the last major milestone towards simplifying Bashneft’s corporate structure. The announced plan improves the dividend flow to all Bashneft shareholders, it rationalises the Company’s assets and creates a far more effective structure for Sistema’s petrochemical and power grid companies.
This substantial value crystalisation will benefit all shareholders and make Bashneft one of the most transparent companies in Russia.”
For further information, please visit www.sistema.com or contact:
Tel.: +7 (495) 692 1100
Tel.: +7 (495) 228 1536
Sistema is the largest publicly-traded diversified holding company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the Company reported revenues of US$ 9.3 billion for the third quarter of 2013, and total assets of US$ 44.4billion as at September 30, 2013. 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 MICEX-RTS Stock Exchange. Sistema was ranked number 315 in the 2012 edition of the Fortune Global 500 list. 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.
1 Sistema owns 50.6% in the charter capital of Sistema
Invest CJSC, Bashneft owns 49.4% in the charter capital of Sistema
Invest CJSC. Sistema Invest CJSC prior to the proposed transaction owns
25.2% in the charter capital of Bashneft.
2 38,139,925 ordinary shares of Bashneft which represents 20.2% of Bashnefts ordinary issued share capital or 16.8% of charter capital
3 Including ownership through 100% subsidiaries of Sistema – Sistema Invest CJSC and Sistema Finance OJSC.