MOSCOW -- Sistema (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, which invests in, and is a major shareholder of, companies operating in different industries, today announced that, as a part of previously announced transaction the Russian government completed the payment for shares of Sistema Shyam TeleServices Ltd. (SSTL), Sistema’s subsidiary in India, which provides telecommunications services under the MTS brandRosimushchestvo paid the rupee equivalent of US$ 600 million for a stake of approximately 17% in SSTL’s share capital. Following the additional share issue, the total stake in the share capital of SSTL owned by Russian parties (Sistema and Rosimushchestvo) will not exceed 74%.

SSTL expects to issue the shares to Rosimushchestvo during the first quarter of 2011, subject to the successful completion of a rights issue to SSTL’s Indian shareholders and compliance with all applicable Indian regulatory requirements. Upon final completion Sistema will announce all the relevant details about this transaction.

SSTL plans to use the funds to finance the continued development of the company, and in particular to strengthen its leading position in wireless broadband (under EV-DO Rev. A). The funds will also be used to expand the branded retail network in its current telecommunication circles and to accelerate the launch of operations in a number of new circles.

Sistema JSFC (London: SSA)