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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