Sistema to partially monetize its stake in Segezha Group

Moscow, Russia - 11 October 2021- Sistema PJSFC ("Sistema" or the "Corporation") (LSE: SSA, MOEX: AFKS), a publicly traded Russian investment company, announces that it has entered into an agreement to sell certain amount of ordinary shares of PJSC Segezha Group ("Segezha Group", the "Company" or the "Holding"), a leading vertically integrated holding company in the timber industry performing a full cycle of operations from logging to advanced wood processing, to Bonum Capital Ltd for a total price of USD 150 million (the "Agreement" or the "Sistema Transaction").

The precise number of Segezha Group shares to be transferred by the Corporation to Bonum Capital Ltd will be determined on the completion date of the Sistema Transaction on the basis of the USD-RUB exchange rate and the average weighted price of Segezha Group shares on Moscow Exchange for the previous six months preceding the date of the Agreement.

Under a separate sale and purchase agreement, Segezha Group shall acquire from Bonum Capital Ltd 100% of the share capital of LLC Inter Forest Rus, the owner of 24 timber industry assets in the Irkutsk and Krasnoyarsk regions, for circa USD 515 million (the "Segezha Group Transaction"). This will enable Segezha Group to double its annual allowable cut and to become one of the largest lease-holders of forest reserves in the world and the largest one in Russia. As a result of this transaction, Segezha Group will also double its sawn timber production capacity and become a global top-10 producer in this segment. The acquisition of these assets also constitutes an important step toward establishing an integrated wood processing cluster in Siberia.

It is anticipated that Sistema Transaction shall be completed in early 2022 subject to satisfaction of a number of conditions precedent, including the closing of the Segezha Group Transaction.

"In recent years Sistema has made great strides in building out its timber holding, which is delivering robust growth and profitability. The Company is steadily expanding its resource base, executing on a major investment programme and strengthening its position both in the Russian market and globally. The divestment of a stake in Segezha Group to Bonum Capital - as well as the Company's successful IPO this spring -demonstrates investors' recognition of our successful efforts to develop this asset. The transaction is also important for Sistema as we execute on our asset monetisation strategy. We are pleased to welcome Bonum Capital Ltd, which has experience in managing timber businesses, as an investor in Segezha Group," said Vladimir Chirakhov, President of Sistema.

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Sistema PJSFC is a publicly traded Russian investment company with a diversified portfolio of assets serving over 150 million customers in the sectors of telecommunications, high technology, financial services, retail, paper and packaging, agriculture, real estate, tourism and medical services. The company was founded in 1993. Revenue in 2020 was RUB 691.6 billion; total assets equalled RUB 1.4 trillion as of 31 December 2020. 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 Moscow Exchange. Website: . 

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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 PJSFC 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 PJSFC Sistema and/or any of its subsidiaries and affiliated companies.

The Segezha Group Transaction price is subject to certain adjustments depending upon, amongst other considerations, changes in net debt and other liabilities, and also the net working capital of LLC Inter Forest Rus and its assets as calculated on the date of the closing of the transaction.