Sistema acquires stake in Ozon from MTS

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Sistema PJSFC (SSA) 
Sistema acquires stake in Ozon from MTS 
 
19-Feb-2019 / 19:45 MSK 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
             Sistema acquires stake in Ozon from MTS 
 
         Moscow, Russia - 19 February 2019 - Sistema PJSFC ("Sistema" or the 
    "Company") (LSE: SSA, MOEX: AFKS), a publicly-traded diversified holding 
   company, announces the signing of a binding agreement to acquire an 18.7% 
 stake in Ozon Holdings Limited ("Ozon"), the leading Russian multi-category 
 online retailer, from MTS PJSC ("MTS") (NYSE: MBT, MOEX: MTSS), the leading 
 telecommunications operator and digital service provider in Russia, for RUB 
   7.9 bn. Shares will be transferred to Sistema through Dega Retail Holding 
     Limited, wholly-owned subsidiary of MTS. The transaction is expected to 
                          close in early March 2019. 
 
    Payment for the shares will be made in three instalments, with the third 
      instalment being paid in July 2021. A market interest rate will apply. 
 
    As a result of the transaction, Sistema's direct ownership stake in Ozon 
       will amount to 19.3%. Sistema has additional exposure to Ozon through 
  Sistema_VC, a venture capital fund focusing on investments in growth-stage 
      technology companies, which holds a 16.3% stake in Ozon. Sistema_VC is 
                          80%-owned by Sistema. 
 
      Ozon is one of Russia's largest e-commerce platforms, ranked second by 
 number of orders and seventh by revenue in the E-Commerce Index Top 100 for 
2017. Ozon offers customers more than 1.6 million SKUs across 23 categories. 
 
   As of the end of 2018, Ozon operated eight fulfilment centres occupying a 
total of more than 100,000 sq m, allowing the company to deliver products to 
 40% of the Russian population the day after an order is placed. In December 
   2018, the company set a record for orders processed - 138,000 in a single 
           day. In 2019, the company plans to more than double its logistics 
    infrastructure by expanding its flagship distribution centre in Tver and 
          opening a new 100,000 sq m fulfilment centre in the Moscow region. 
 
In 2018, Ozon's business grew at its fastest rate in the last decade. In the 
     first half of 2018, revenue increased by 76% year-on-year. Some product 
categories - including clothing and foodstuffs - posted revenue increases in 
                          excess of 100%. 
 
                          Alexei Katkov, Managing Partner at Sistema, said: 
 
  "We believe Russian e-commerce has excellent growth potential. The current 
  level of e-commerce penetration in Russia (5% of total retail turnover) is 
well below global averages (10-15% in developed markets and 20% in China and 
            South Korea) and is forecast to double over the next five years. 
 
          "Sistema's shareholding in Ozon represents a strategic bet on this 
   high-growth market. Ozon's strengths include its wide product assortment, 
 wholly-owned logistics infrastructure, well-recognised brand, best-in-class 
        customer support and a recently launched marketplace for third-party 
       sellers. Ozon has a strong management team that has already delivered 
   impressive growth rates and demonstrated ability to achieve technological 
 and market leadership in the market that is highly fragmented and currently 
                          undergoing consolidation. 
 
     "As one of Ozon's largest shareholders, we will continue to support the 
  company in executing on its market consolidation strategy and we will seek 
             to further increase our exposure to this high-growth business." 
 
             *** 
 
       For further information, please visit www.sistema.com [1] or contact: 
 
     Investor Relations         Public Relations 
 
       Nikolai Minashin Sergey Kopytov 
 
Tel: [phone] Tel.: [phone] 
 
  [e-mail]       [e-mail] 
 
             *** 
 
This announcement contains inside information. Full name and position of 
person making the announcement - Nikolai Minashin, Director, Investor 
Relations 
 
             *** 
 
      Sistema PJSFC is a publicly-traded diversified Russian holding company 
    serving over 150 million customers in the sectors of telecommunications, 
          children's goods retail, paper and packaging, healthcare services, 
     agriculture, high technology, banking, real estate, pharmaceuticals and 
   hospitality. The company was founded in 1993. Its revenue in 2017 was RUB 
     704.6 bn; its total assets equalled RUB 1.1 trn as of 31 December 2017. 
   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: www.sistema.com [2]. 
 
ISIN:          US48122U2042 
Category Code: MSCH 
TIDM:          SSA 
LEI Code:      213800JSZ2UUK4QQK694 
Sequence No.:  7563 
EQS News ID:   777779 
 
End of Announcement EQS News Service 
 
 
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2: https://link.cockpit.eqs.com/cgi-bin/fncls.ssp?fn=redirect&url=6e566001103bf8b2bd1a5427ea3e04fe&application_id=777779&site_id=vwd&application_name=news 
 

(END) Dow Jones Newswires

February 19, 2019 11:45 ET (16:45 GMT)