SSA.L Regulatory News (SSA)

Sistema to retain stake in MTS after share buyback

Moscow, 6 September 2017 - Sistema PJSFC ("Sistema") (LSE: SSA, MOEX: AFKS), a publicly traded diversified holding company operating primarily in Russia and the CIS, announces that its subsidiary Sistema Finance S.A. has signed a sale and purchase agreement for shares in PJSC MTS ("MTS") as part of the second stage of the buyback programme for MTS shares approved by the Board of Directors of MTS in April 2016 (the "Programme").

During the second stage of the Programme, which will be effective until April 2019, MTS's subsidiary LLC Stream Digital (the "Purchaser") plans to acquire shares and American depositary shares of MTS (collectively, the "Shares") in the open market. Under the agreement, Sistema Finance may sell to the Purchaser ordinary shares of MTS in the amount calculated based on the number of Shares to be purchased by the Purchaser in the open market in proportion to Sistema Group's effective equity stake in MTS (50.004% as of 6 September 2017).

Sistema Group's effective stake in MTS will therefore not change materially as a result of the Programme.

The Purchaser will purchase ordinary shares from Sistema Finance based on the weighted average price of Shares at which the Purchaser purchased them in the open market for each calendar month*.

Sistema's President Mikhail Shamolin said: "Sistema plans to continue participating in the buyback of MTS shares in proportion to the operator's minority shareholders, while maintaining control of the company."

\* Taking into account the discount of the market value of MTS ordinary shares to American depositary shares.

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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 - Yury Krebs, Director, Investor Relations

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Sistema PJSFC is a publicly traded diversified Russian holding company serving over 150 million customers in such sectors as telecommunications, retail, paper and packaging, agriculture, high technology, banking, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2016 reached RUB 697.7bn; its total assets equalled RUB 1.1tn as of 31 December 2016. Sistema's global depositary receipts are listed under the "SSA" ticker on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.ru

THIS ANNOUNCEMENT IS FOR GENERAL INFORMATION ONLY AND DOES NOT FORM PART OF ANY OFFER TO SELL, OR THE SOLICITATION OF ANY OFFER TO BUY, SECURITIES. THE DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. PERSONS READING THIS ANNOUNCEMENT SHOULD INFORM THEMSELVES OF AND OBSERVE ANY SUCH RESTRICTIONS. THIS ANNOUNCEMENT CANNOT BE USED AS A BASIS FOR ANY INVESTMENT AGREEMENT OR DECISION.