Sistema and Russia-China Investment Fund announce launch of offering for up to 8% of Detsky mir shares

11 December 2017, Moscow, Russia. Public Joint Stock Company “Detsky mir” (the “Company” or “Detsky mir”), Russia’s largest specialised children’s goods retailer, announces that Sistema PJSFC (“Sistema”), which is the majority shareholder of the Company, and the Russia-China Investment Fund (“RCIF”) have announced the launch of an offering of up to 8% of the Detsky mir shares by way of accelerated book building (the “Offering”).

Completion of this transaction by Sistema may result in a decrease of Sistema’s shareholding below 50%+1 voting shares in the charter capital of Detsky mir, which gives certain eligible creditors of Detsky mir the right to request early repayment under their respective debt facility agreements.

As of the date of this announcement Detsky mir discloses that it has received written confirmations from all of such creditors indicating their consent to amend respective covenants in debt facility agreements, so that the completion of the Offering would not trigger early repayments. Respective amendments to the contractual credit documentation are expected to be signed by 31 December 2017.

Following the Offering, Sistema is expected to remain the majority shareholder of Detsky mir and anticipates that it will continue to consolidate Detsky mir in Sistema Group IFRS financial statements, even in the event that Sistema’s shareholding decreases below 50% of the Company’s share capital as a result of the Offering. The Offering is not expected to cause any material changes in the Company’s ongoing operations and business activities, nor in the Company’s governance including the composition of the Company’s Board of Directors.

Sistema’s announcement is available at www.sistema.com.

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Copies of this announcement are not being made and may not be distributed or sent, directly or indirectly, into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia or Japan

This announcement is not and does not form part of any offer or solicitation to purchase or subscribe for securities in the United States.  The securities referred to herein are not registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. PJSC Detsky mir does not intend to register any portion of the offering of any securities referred to herein in the United States or to conduct a public offering of the securities in the United States.

This communication does not constitute an offer of the securities to the public in the United Kingdom.  No prospectus has been or will be approved in the United Kingdom in respect of the securities.  This communication is being distributed to and is directed only at (i) persons who are outside the United Kingdom; (ii) persons who are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended from time to time (the “Order”); (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order; (iv) certified high net worth individuals and certified and self-certified sophisticated investors as described in Articles 48, 50 and 50A, respectively of the Order; and (v) persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as “Relevant Persons”).  Any investment activity to which this communication relates will only be available to and will only be engaged with, Relevant Persons.  Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

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