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. Last Updated: 07/27/2016

Sistema Gets Listed on the RTS

AFK Sistema, one of Russia's biggest conglomerates, has received a listing of its ordinary shares on the Russian Trading System exchange as a first step to placing its shares in London, Sistema said Tuesday.

"As previously announced, Sistema is also considering a listing of its shares on the London Stock Exchange in 2005 through an offering of Global Depositary Receipts," Sistema said in a statement.

Credit Suisse First Boston and Morgan Stanley are the financial advisers for the international listing, with Troika Dialog acting as Russian financial adviser.

The Russian security watchdog has approved the listing of ordinary shares on the RTS and the Moscow Stock Exchange.

Russian companies are eager to raise funds through share placements but prefer to offer stock on foreign exchanges where liquidity is much higher than at home. Russian law obliges them to carry out domestic listings first, which are often small and illiquid.

Sistema, with holdings in telecoms and insurance, has expressed interested in the privatization of national telecoms holding Svyazinvest planned for 2005, and analysts have said Sistema wants to raise funds for the sale through the IPO.

The government has not yet signed a resolution on Svyazinvest's privatization but the IT and Communications Minister Leonid Reiman has said the 75 percent less one stake in the holding was worth $2 billion.

The current market value of Svyazinvest's holdings -- it controls 7 regional telecoms firms, long-distance monopoly Rostelecom and numerous other providers -- is around $2.5 billion.

Sistema's assets totaled $6.8 billion in 2003 and last year's revenues amounted to $3.8 billion.

Its key assets are top Russian mobile service provider MTS, Moscow fixed-line incumbent MGTS, and ROSNO insurance company, in which Germany's Allianz holds 45 percent.

It also has interests in retail, construction, technology and real estate.

Sistema head Vladimir Yevtushenkov, who owns more than 75 percent of the company, has said Sistema also plans an IPO for its technology unit, Scientific Center, in 2007.

Sistema plans an IPO for insurance company ROSNO and has long wanted to issue American Depositary Receipts for 12 percent to 18 percent of MGTS, in which it holds 55.62 percent. However, Svyazinvest, which holds 28 percent, opposes the plan.