AFK Sistema : Detsky Mir Announces IPO Price Range

26/01/2017

Detsky Mir Announces IPO Price Range

Moscow, Russia - 26 January 2017 - Sistema PJSFC ('Sistema' or 'the Corporation') (LSE: SSA; MOEX: AFKS), a Russian public diversified holding company, notes that its subsidiary, PJSC Detsky Mir ('the Company' and, together with its subsidiaries, 'Detsky Mir') has announced the price range for its initial public offering (the 'Offering') of ordinary shares (the 'Shares'). Sistema plans to participate in the Offering as a selling shareholder, and retain a controlling stake in the Company following completion of the Offering.

• The price range for the Offering has been set at between RUB 85 and RUB 105 per Share.
• The Selling Shareholders are expected to sell a total of up to 247.9 million Shares, including the over-allotment option, which based on the announced price range would represent an Offering size of between RUB 21.1 billion and RUB 26.0 billion, valuing the Company at between RUB 62.8 billion and RUB 77.6 billion.
• The full text of Detsky Mir's announcement with further details on the Offering is available at corp.detmir.ru/en/

Sistema President Mikhail Shamolin said: 'We believe that the price range reflects Detsky Mir's strong business model, solid track record and significant potential for further profitable growth. Detsky Mir's IPO represents the first opportunity for a broad pool of investors to gain exposure to a uniquely attractive asset that is growing faster and delivering higher returns than other companies in the Russian retail universe. We continue to believe Detsky Mir has significant growth opportunities, which is a major reason why Sistema will retain a controlling stake in the Company following completion of the Offering, while offering new investors the opportunity to share in the potential upside.'

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For further information, please visit www.sistema.ru or contact:

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.

Detsky Mir is the largest specialised children's goods retailer in Russia, with a diversified product portfolio comprising toys, products for newborns, fashion (apparel and footwear), large items, and other products. It is the market leader both in terms of size of store network and in terms of revenue in the highly fragmented market for children's goods in Russia. According to Ipsos Comcon, in 2015, Detsky Mir had an estimated share of 32% (24% in 2014) of the specialised children's goods retail market in Russia and 13% (10% in 2014) of the total market for children's goods in Russia (including hyper- and supermarkets). As at 31 December 2016, Detsky Mir operated a network of 525 stores, comprising 468 stores in Russia and 12 stores in Kazakhstan operating under the 'Detsky mir' brand and 45 ELC stores in Russia.

Copies of this announcement are not being made and may not be distributed or sent, directly or indirectly, into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia or Japan.

This announcement is not and does not form part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein are not registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. PJSC Detsky mir does not intend to register any portion of the offering of any securities referred to herein in the United States or to conduct a public offering of the securities in the United States.

This communication does not constitute an offer of the securities to the public in the United Kingdom. No prospectus has been or will be approved in the United Kingdom in respect of the securities. This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom; (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended from time to time (the 'Order'); (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; (iv) certified high net worth individuals and certified and self-certified sophisticated investors as described in Articles 48, 50 and 50A, respectively of the Order; and (v) persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as 'Relevant Persons'). Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

This communication is distributed in any member state of the European Economic Area which applies Directive 2003/71/EC (this Directive together with any implementing measures in any member state, the Prospectus Directive) only to those persons who are qualified investors for the purposes of the Prospectus Directive in such member state, and such other persons as this document may be addressed on legal grounds, and no person that is not a relevant person or qualified investor may act or rely on this document or any of its contents.