Sistema and MTS to Jointly Develop Content Business

6 Jun 2012 07:00

Sistema JSFC ("Sistema") (LSE: SSA), the largest diversified publicly-traded investment company in Russia and the CIS, announces that it has agreed to join forces with Mobile TeleSystems OJSC ("MTS") in developing and managing the multimedia content portal Stream.ru (formerly Omlet.ru).

Sistema contributed RUB 496.1 million to the Stream's charter capital and, upon completion of state registration procedures in accordance with Russian law, will obtain a 55% stake. This reduces MTS' stake to 45%.

Stream LLC will operate under the Stream brand and will be managed by Sistema's subsidiary Sistema Mass Media JSC.

Andrei Dubovskov, President and Chief Executive Officer of MTS, highlighted: "MTS has developed one of the most successful start-ups in the Russian media content market. The time has come to elevate this project to the next stage, which requires attracting both financial resources and experience in media. Investments from Sistema and the unique expertise of Sistema Mass Media will enable Stream.ru to enhance its position in the fast-growing market for video and audio content. The structure of the transaction allows MTS to retain stake in the asset in order to leverage competitive advantages through the launch of media content services in mobile and fixed networks. We also expect the transaction to add momentum to the development of the legal content market in Russia."

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented: "We envision Stream's mission in becoming a universal point of access to the variety of media content. We think that the financial resources of Sistema, MTS' expertise, as well as Sistema Mass Media's experience in production, aggregation and distribution of video content, will allow to create a leader in the Russian media content market and increase shareholder value."

Stream.ru is a multimedia content portal launched by MTS in 2009. Its content is available on Smart TV devices from Samsung, LG, Panasonic, Philips as well as smartphones, tablets. set-top boxes, and PCs. Stream's portfolio includes about 7,000 movies and TV series episodes from leading international and Russia studios (Universal, Sony Pictures Entertainment, Warner Bros. Entertainment, Walt Disney, Bazelevs, Central Partnership). Monthly audience of the portal consists of more than 1.5 million unique visitors.

The Company is not an investment company, and is not and will not be registered as such, under the U.S. Investment Company Act of 1940.

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

Sistema is the largest diversified publicly-traded investment company in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the company reported revenues of US$ 7.9 billion for the first quarter of 2012, and total assets of US$ 47.3 billion as at March 31, 2012. Sistema's global depository receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the symbol "AFKS" on the MICEX-RTS Stock Exchange, and under the symbol "SIST" on the Moscow Stock Exchange (MSE). Sistema was ranked number 342 in the 2010 edition of the Fortune Global 500 list. Website: www.sistema.com

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of JSFC Sistema and/or any of its subsidiaries and affiliated companies, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the shares or securities of JSFC Sistema and/or any of its subsidiaries and affiliated companies.

Copyright Business Wire 2012