Sistema Completes Purchase of Controlling Stake in Bashkir Oil

Sistema, the largest diversified public corporation in Russia and the CIS, which manages fast growing companies operating in the telecommunications, consumer services sectors and technology industries, has concluded the acquisition of a controlling stake in Bashkir Oil and Energy Group with a first tranche of US $2.0 billion paid to Agidel-Invest LLC, Ural-Invest LLC, Inzer-Invest LLC and Yuryuzan-Invest LLC.

As a result of this transaction, Sistema now owns a 76.52% stake in ANK Bashneft JSC, a 65.78% stake in Ufaneftechim JSC, a 87.23% stake in Novoil JSC, a 73.02% stake in Ufaorgsintez JSC, a 78.49% stake in Ufimskiy NPZ JSC and a 73.33% stake in Bashkirnefteproduct JSC. According to the terms of the deal, the second tranche of the remaining US $500 million will be paid on a deferred basis after 14 months.

Bashkir Oil and Energy Group is a top ten oil production company in Russia (with 11.7 million tons produced in 2008), the fifth largest oil processing Russian company (with 21 million tons processed in 2008) and the fourth largest company by oil reserves (over 310 million tons). The Group's revenues amounted to RUB 161.3 billion for the first nine months of 2008 RAS.