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Financial Corporation "Sistema"

July 6, 2011

RWS obtains loan from ING Bank N.V. and Sberbank of Russia secured against its library of video content

Moscow, Russia – July 6, 2011– JSFC Sistema (“Sistema”) (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announced that ING Bank N.V. (“ING”), the Moscow Bank of Sberbank of Russia (“Sberbank”) and CJSC Russian World Studios (“RWS”) have signed an agreement to provide RWS, a subsidiary of Sistema, with a loan secured against RWS’ own library of video content.

ING Bank and Sberbank will provide RWS with a 3-year secured club loan of RUB 1.2 billion with OJSC Sistema Mass-Media acting as a guarantor. This is an unprecedented transaction for the Russian corporate credit market as it is the first time in the history of the Russian media industry that a loan is to be granted with a library of video content as security.

At the same time, Diederik van Wassenaer, Member of the ING Commercial Banking Management Team, Herman Gref, Chairman of the Board and CEO of Sberbank, and Vladimir Evtushenkov, Chairman of Sistema, signed a memorandum of understanding that outlines the principles of strategic cooperation between these three companies for further development of the Russian media industry.

The deal was structured and coordinated by ING Bank. The media industry is a priority sector for ING. Having set up a specialized division to provide media companies with a full range of finance products the bank has many years of successful experience in various markets across the world. The necessary risk assessment and the organization of the loan was made possible by a combination of the bank’s extensive international experience in structuring similar deals in both the United States and Europe, and Sberbank’s position and expertise as Russia’s largest bank. 

The signing of the memorandum of understanding reflects the fact that a civilized intellectual property market has been created in Russia according to internationally recognised economic and legal standards that have been successfully implemented across the world’s financial markets and the global film industry.

Vladimir Evtushenkov, Chairman of the Board of Directors at Sistema, commented: “Using the library of rights as a business tool is common practice for film companies abroad; but this kind of deal sets a precedent in Russia. Sistema is interested in establishing a public credit history for RWS. For the first time in the Russian market, content has been used as security, therefore, making it possible for the company to develop its business more actively and to create new products which, in turn, will help extend the library and to increase its value.”

Herman Gref, Chairman of the Board and CEO of Sberbank, commented: “This deal is unique to the Russian corporate lending market as it is the first transaction organized in Russia for a media company according to the common practices in the global media industry. The structure of the transaction will trigger further developments for financing media projects in Russia. We see benefits for Sberbank from implementation of this project in the development of our syndicated lending in our regional branches.”  

“The Russian business is developing strongly, and more and more banking products that exist worldwide are being offered to and sought by Russian clients”, noted Diederik van Wassenaer. “Since 1993, ING has been a partner bank to major Russian companies with high standards of business behavior. We will definitely continue to provide assistance and support for the development of the Russian market in the future”. 

 

 

 

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