OREANDA-NEWS. On March 30, 2009 Sistema (LSE: SSA), 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, announced that it has signed an agreement with Agidel-Invest LLC, Ural-Invest LLC, Inzer-Invest LLC and Yuryuzan-Invest LLC to acquire their stakes in Bashkir Oil and Energy Group companies, including ANK Bashneft JSC, Ufaneftechim JSC, Novoil JSC, Ufaorgsintez JSC, Ufimskiy NPZ JSC and Bashkirnefteprodukt JSC, reported the press-centre of Sistema.

The deal is expected to be concluded for a total cash consideration of US 2.5 billion. The payment is being made in two tranches with US 2.0 billion paid upon the completion and US 500 million being paid on a deferred basis after 14 months. The completion of the deal is contingent upon the fulfillment of a number of conditions.

In 2005, Sistema-Invest, a subsidiary of Sistema, acquired minority stakes in Bashkir Oil and Energy Group’s subsidiaries. Following the completion of this transaction Sistema will own 76.52% stake in ANK Bashneft JSC, 65.78% stake in Ufaneftechim JSC, 87.23% stake in Novoil JSC, 73.02% stake in Ufaorgsintez JSC, 78.49% stake in Ufimskiy NPZ JSC and 73.33% stake in Bashkirnefteproduct JSC. Furthermore, in accordance with the Russian legislation Sistema plans to make an offer to minority shareholders of Bashkir Oil and Energy Group for purchase of their shares.
 
Leonid Melamed, President and Chief Executive Officer, commented: “Sistema and its Group companies have been operating in Bashkortostan for a number of years. We are confident that the acquisition of controlling stakes in Bashkir Oil and Energy Group companies will underpin our cooperation with the Republic.

We plan to further develop and build up the production potential of the oil companies thus strengthening the economy and social infrastructure in Bashkortostan. Furthermore, the creation of a vertically integrated oil company will sustain further economic development and rational use of the Republic’s potential in the future. The increase in Sistema’s ownership of Bashkir Oil and Energy Group companies is in line with our strategy to create additional shareholder value.  This transaction will allow us to maximize the returns from our portfolio investments and to receive another steady source of cash flows.”