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Sistema JSFC subsidiary CJSC Sistema-Inventure acquires over 1% of ordinary shares of MGTS

Sistema Friday announced that CJSC Sistema-Inventure, a wholly-owned subsidiary of Sistema JSFC, acquired more than 1% of the ordinary shares of MGTS at a price of RUB 436.20 per share, for total cash consideration of RUB 370 million (approximately US$ 12.3 million). Sistema is the largest diversified public financial corporation in Russia and the CIS, and invests in, and is a major shareholder of, companies operating in different industries.

The purchase was made in accordance with the mandatory tender offer announced by Sistema JSFC on November 13, 2010. Sistema has interests in 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$ 7.3 billion for the third quarter of 2010, and total assets of US$ 42.0 billion as at September 30, 2010.
In a separate investment early Feb, Sistema announced the creation of OJSC RTI with an investment from the Bank of Moscow. Sistema will contribute its 97% stake in OJSC Concern RTI Systems, as well as RUB 2.88 billion (approximately US$ 97 million) in cash to the new entity’s charter capital, while the Bank of Moscow will make a RUB 3 billion (approximately US$ 100 million) cash contribution.

The deal was finally signed and sealed on Feb. 24, 2010 between Sistema and Bank of Moscow to establish OJSC RTI following the receipt of the Federal Antimonopoly Services permission and issuance of 84.6% of the share capital of the newly established company to Sistema and 15.4% to the Bank of Moscow.

As a result, the Bank of Moscow will receive a 15.4% stake in RTI, while Sistema will control 84.6% of the new entity. The latest investment comes fresh from the previous investment early this month, marking Sistema’s aggressive expansion and growth strategy in the country.

With its contribution of 97% stake in OJSC Concern RTI Systems and RUB 2.88 billion (approximately US$ 97 million) in cash to the new entity’s charter capital, the firm is signaling its quest for unrivalled expansion.

MGTS’s top priority is providing high-quality and affordable voice service to millions of Muscovites. MGTS runs 527 telephone exchanges and 7,000 payphones in the city. MGTS's share of main phone stations on the Moscow fixed-line communication market is 77.2 percent.

MGTS’s base network includes digital equipment based on the latest synchronous digital hierarchy (the SDH technology).

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