SSA.L Regulatory News (SSA)

Sistema and RCIF launch offering for up to 8% of Detsky mir shares

Moscow, Russia - 11 December 2017 - Sistema PJSFC ("Sistema" or "the Corporation") (LSE: SSA; MOEX: AFKS), a publicly traded diversified Russian holding company, together with the Russia-China Investment Fund ("RCIF") announce the launch of offering (the "Offering") of up to 8% of PJSC Detsky mir ("Detsky mir" or the "Company") ordinary shares (the "Shares"), corresponding up to 6.3% Shares expected to be sold by Sistema and up to 1.7% Shares by RCIF.

The Shares will be offered (i) to institutional investors outside the United States in compliance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or (ii) in the United States only to qualified institutional buyers1, as defined in Rule 144A under the Securities Act, in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act. The price per Share will be determined by way of an accelerated bookbuilding process, which is to start immediately. A further announcement will be made by the Corporation following completion of the bookbuilding and pricing of the Offering.

Following the Offering, Sistema is expected to remain the majority shareholder of Detsky mir and anticipates that it will continue to consolidate Detsky mir in Sistema Group IFRS financial statements, even in the event that Sistema's shareholding decreases to below 50% of the Company's share capital as a result of the Offering. The Offering is expected to increase Detsky mir's free float and the liquidity of its shares, and is not expected to cause any material changes in the Company's governance, including the composition of the Company's Board of Directors.

Credit Suisse Securities (Europe) Limited and Morgan Stanley & Co. International plc are acting as joint bookrunners in connection with the Offering.

Any ordinary shares in Detsky mir held by Sistema and RCIF which are not sold in the Offering will be subject to a 90-day lock-up undertaking, subject to certain customary exceptions and/or waiver by the joint bookrunners.

1 According to the definition of the Rule 144A of the Securities Act

***

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

***

This announcement contains inside information. Full name and position of person making the announcement - Yuri Krebs, Director, Investor Relations

***

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.