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SSAA - AFK Sistema PAO News Story

$5.34 0.0  0.0%

Last Trade - 08/09/20

Market Cap £2.06bn
Enterprise Value £9.00bn
Revenue £6.08bn
Position in Universe 266th / 1806

UPDATE 1-EXCLUSIVE-Russia's RDIF in talks over control of Sistema's retail, power assets - sources

Fri 12th January, 2018 5:16pm
(Adds details, background) 
    By Tatiana Voronova and Vladimir Soldatkin 
    MOSCOW, Jan 12 (Reuters) - Russian conglomerate Sistema, 
which has to make a big payment to energy giant Rosneft 
 ROSN.MM  to settle a business dispute, is in talks with one of 
the country's sovereign wealth funds about transferring two of 
its companies, sources said on Friday. 
    The negotiations concern the possibility of the state-owned 
Russian Direct Investment Fund (RDIF) taking over control of two 
  retail and power businesses from Sistema, a banking source and 
a source close to the conglomerate told Reuters. 
    Asked by Reuters for comment, RDIF said it had no plans to 
take over the assets, and Sistema said it was not planning to 
transfer the assets to the fund. 
    The dispute centred on mid-sized oil company Bashneft 
 BANE.MM , pitting Rosneft's chief executive Igor Sechin, a 
close ally of President Vladimir Putin, against Sistema owner 
Vladimir Yevtushenkov, a billionaire who some Russian media 
reports suggest is close to Prime Minister Dmitry Medvedev. 
    Under the settlement announced last month, Sistema has to 
pay Rosneft 100 billion roubles ($1.8 billion) by March 30 and 
RDIF has agreed to lend Sistema 40 billion roubles. Russia's 
largest lender Sberbank  SBER.MM  will also help Sistema to 
raise funds before the deadline.*:nL8N1OM3ZF 
    Sistema put up two of its assets, toy retailer Detsky Mir 
 DSKY.MM  and the Bashkirian Power Grid Company, as collateral 
against the RDIF loan.*:nL8N1OR0YY The talks centre on the 
possible transfer of these firms to the fund.      
    "The parties have been in discussion over the terms and the 
deal structure," a banking source said. 
    Another source, close to Sistema, confirmed that such talks 
have been under way and that the terms of the deal have not yet 
been agreed. It was not clear whether they would include any 
cash payments to Sistema or it would be non-cash transaction.  
    RDIF said in the emailed comments that the fund did not plan 
to acquire or in any way "gain control" over the assets. "RDIF 
acts as the arranger of the 40 billion-rouble-financing secured 
by these assets, as it was set in the amicable agreement," the 
fund said.  
    Sistema's spokesman said that the company was not 
considering transferring control over Detsky Mir and Bashkirian 
Power Grid Company to RDIF.  
    The RDIF's possible acquisition of the assets would mark a  
boost for the fund, which is headed by ex-banker Kirill 
Dmitriev. RDIF, which manages capital of $10 billion, was 
launched in 2011 with the aim of attracting foreign investments 
to Russia. 
    The dispute over Sistema is part of a larger tussle for 
influence within Russia's ruling elite, according to three 
sources close to the Kremlin and the Russian government, who 
spoke on condition of anonymity. 
    One on side is a camp, including Sechin, which wants the 
state to have a powerful role in the economy and which has ties 
to the security forces, according to one of the sources. 
    On the other side is a loose coalition of Sechin opponents 
made up of self-made tycoons, economic liberals and others who 
bear grievances against Sechin for a variety of reasons, the 
source said.  
    Putin, who is running for re-election in March, has in the 
past tried to maintain a balance of power between the two camps. 
But under the constitution he can serve only one more six year 
term, and the prospect of his leaving the scene has intensified 
jockeying over who will succeed him, according to two Western 
    It was not clear what, if any, side the state investment 
fund is taking in the dispute between Sistema and Rosneft.  
    RDIF boss Dmitriev is close to Putin's inner circle but is 
not seen in Russian business circles as a political player loyal 
to any particular Kremlin camp.  
    Rosneft representatives have in the past repeatedly denied 
that Sechin's actions are part of any political intrigue, saying 
he is only pursuing the interests of Rosneft and its main 
shareholder, the Russian state. 
    ($1 = 56.5008 roubles) 
 (Reporting by Tatiana Voronova and Vladimir Soldatkin; editing 
by Katya Golubkova and David Stamp) 
 ((; +7 495 775 12 42; Reuters 
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