SSA.L Regulatory News (SSA)

Sistema and RCIF successfully complete an offering of Detsky mir shares

Moscow, Russia - 12 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 that they have successfully completed accelerated bookbuilding offering (the "Offering") of 46.5 million ordinary shares in PJSC Detsky mir ("Detsky mir" or the "Company"), representing approximately 6.3% of the Company's share capital.

The Offering was priced at RUB 90 per share.

As part of the Offering, Sistema has agreed to sell 36,633,502 ordinary shares in the Company representing approximately 5% of the Company's share capital. Sistema will receive approximately RUB 3.3 billion in proceeds from the Offering (before applicable fees and taxes).

Following the Offering, Sistema will retain 47.1% in the share capital of Detsky mir and anticipates that it will continue to consolidate the Company in Sistema Group IFRS financial statements. RCIF, the second largest shareholder of Detsky mir, will own 12.7% of the Company's ordinary shares, while the Company's free float is expected to reach approximately 40.2% following the Offering. The Offering is thus expected to increase the liquidity of Detsky mir's stock.

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.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, said: "This transaction increases Detsky mir's free float and stock liquidity which is expected to help us further unlock the value of the Company. Since its IPO in February 2017, Detsky mir continued to strongly outperform other publicly traded Russian retailers in terms of both operating and share price performance. At the same time, Detsky mir's business in Russia and the CIS retains significant potential for growth, and Sistema will remain the Company's largest shareholder fully committed to Detsky Mir's further profitable growth."

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

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

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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.