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. Last Updated: 07/27/2016

Sistema Goes Public in Record Offering

VedomostiVladimir Yevtushenkov
Sistema, a holding company controlled by billionaire Vladimir Yevtushenkov, began selling as much as $1.55 billion of shares Tuesday in the country's biggest-ever initial public offering.

Sale managers Morgan Stanley and Credit Suisse First Boston started offering 79.6 million global depositary receipts of the Moscow-based company at $15 to $19.50 each, Sistema said in a statement. The GDRs will be traded on the London Stock Exchange. Sistema shares are already listed on the Russian Trading System.

Started in 1993 by Yevtushenkov, Sistema owns a controlling stake in Mobile TeleSystems, Eastern Europe's largest mobile phone company, which accounts for more than two-thirds of its revenue. Sistema's sale is five times bigger than Mechel Steel Group's $331 million October IPO in New York, the biggest to date, according to data compiled by Bloomberg.

Sistema's net income under U.S. generally accepted accounting principles almost doubled to $337 million in the first nine months of last year, from $176 million in the same period of 2003. Revenue rose 59 percent to $4.1 billion, the company said in a statement posted on its web site.

Yevtushenkov, who owns more than 75 percent of Sistema, was ranked by Forbes magazine last year as the 14th-richest man in Russia, with $2.1 billion. Moscow is home to the world's largest clutch of billionaires.

Yevtushenkov named himself to the post of chief executive of Sistema ahead of the IPO.

He swapped places with Yevgeny Novitsky, who had served as Sistema CEO since 1995 and will now chair its board.

"The appointment of Yevtushenkov reflects his desire to take an executive role in the development of Sistema ahead of its planned transition from a private company to a publicly listed corporation," Sistema said in a statement posted on its web site.