Sistema Acquires Perm Motors Group.

MOSCOW -- Sistema (LSE:SSA) the largest private sector consumer services company in Russia and the CIS, today announced the acquisition of 81.25% of ZAO Sahles. The stake was acquired from ZAO Technoinvest, a subsidiary of ZAO Vneshtorgbank Retail Services.

ZAO Sahles owns controlling stakes in the entities which constitute the Perm Motors group, which, following the acquisition, will become part of Concern RTI Systems - a business segment of Sistema focusing on high-tech projects in radio technology, airspace navigation systems and the construction of power machines.

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Sistema is the largest private sector consumer services company in Russia and the CIS, with over 60 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 7.59 billion for the full year 2005, and total assets of US$ 13.09 billion as at December 31, 2005. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "SIST" on the Moscow Stock Exchange (MSE).

OAO Concern RTI Systems, founded in 2000, consolidates a number of Russian companies focusing on unique high-tech projects in radio technology, airspace navigation systems and power machine-building, such as OAO RTI, OAO NIIDAR, OAO Saratov Television Plant, OAO Yaroslavl Radio Plant, OAO UralElectro, OAO DMZ-Kamov, OAO MTU Saturn, OAO OKB Planeta and others. Additional information is available at www.rtisystems.ru.

Perm Motors is a group of businesses focused on design and manufacturing of aircraft and industrial engines and gas turbines. ZAO Sahles controls 100% minus 1 share in ZAO PM-Nedvizhimost, 100% minus 1 share in ZAO REMOS-PM, 100% minus 1 share in ZAO Instrumentalny Zavod - PM, 98.6% in Energetik-PM, 34.35% in ZAO Kaskad-PM, 71.64% in OAO Permsky Motorny Zavod, 49% in ZAO Metallist-PM, 99% in OOO Nedvizhimost-PM and 100% minus 1 share in ZAO Zheleznodorozhnik-PM.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.