SSA.L Regulatory News (SSA)

FOR IMMEDIATE RELEASE

SISTEMA COMPLETES EARLY REDEMPTION OF RUB 10 BILLION EXCHANGE-TRADED BOND

Moscow, 18 August 2016 - Sistema PJSFC ("Sistema" or the "Company") (LSE: SSA, MOEX: AFKS), a publicly-traded diversified holding company operating primarily in Russia and the CIS, today exercised an early redemption of its 15-year RUB 10 billion BO-01 series exchange-traded bond issue.

The bonds were redeemed at par value at the issuer's discretion, in accordance with the Resolution on the issue of securities. The Company also paid out the coupon for the third coupon period in the amount of RUB 847.7 million.

Sistema Senior Vice President Vsevolod Rozanov said: "Sistema continues to pursue a strategy aimed at lowering its debt levels and optimising the Company's liabilities. The early redemption of these bonds, along with early repayment of debt guaranteed by Sistema at SSTL, our subsidiary in India, and the prior agreement to carry out a phased acquisition of the Russian Government's stake in SSTL, will help to further strengthen Sistema's financial stability, enhance our ability to make investments, and will also increase returns for our shareholders."

The BO-01 series exchange-traded bonds were placed in February 2015 at 100% of par value with maturity in 2030 and a coupon rate of 17% p.a.

As of today, Sistema's publicly traded debt instruments are its series 03 bond issue amounting to RUB 15 billion, a USD 500 million Eurobond, as well as three exchange-traded bond issues amounting to RUB 16.7 billion.

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Sistema 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 708.6bn; its total assets equalled RUB 1.3tn as of 31 December 2015. Sistema's global depository 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 Stock Exchange. Website: www.sistema.com