OREANDA-NEWS. November 1, 2012. Sistema JSFC ("Sistema" or the "Company") (LSE: SSA), the largest publicly-traded diversified holding company in Russia and the CIS, today announces that it has signed a non-binding indicative offer with Mobile TeleSystems OJSC ("MTS") and MTS Bank OJSC ("MTS Bank") regarding the issuance of up to 25.095% stake in MTS Bank to MTS.

Under the terms of the indicative offer, MTS would acquire up to 25.095% stake in MTS Bank through an additional share issue by MTS Bank for up to RUB 5.09 billion. The proceeds from the transaction will be added to MTS Bank's charter capital. Once the transaction is completed, MTS will become the second largest shareholder in MTS Bank, while Sistema's direct stake in MTS Bank will be 65.3%.

The indicative offer is not legally binding. The transaction is subject to corporate approvals by Sistema and MTS, regulatory approvals by the Federal Antimonopoly Service of Russia and the Central Bank of Russia, satisfactory conclusion of due diligence, and execution of binding documentation. The additional share issue is also subject to approval by an Extraordinary General Meeting of MTS Bank Shareholders.

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented: "The acquisition of a stake in MTS Bank by MTS will unlock synergies between financial and mobile services. The consumer finance sector is expected to see significant growth over the coming years and this partnership positions both MTS and MTS Bank to benefit from this opportunity".