RCIF and Sistema launch Detsky Mir shares offering

Moscow, November 15, 2019  The Russia-China Investment Fund (RCIF, established by RDIF and China Investment Corporation) and Sistema PJSFC (“Sistema” or the “Corporation”) (LSE: SSA; MOEX: AFKS), a publicly traded diversified Russian holding company, announce the launch of an offering of at least 150 million existing shares in Detsky Mir (the “Offering”).


· The shares are being offered (i) outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and (ii) within the United States to certain qualified institutional buyers as defined in, and in reliance on, Rule 144A under the Securities Act

· The Offering will consist exclusively of existing shares held by Sistema and RCIF via its investment vehicles Floette Holdings Limited and Exarzo Holdings Limited (collectively, the “Selling Shareholders”)

· An offering memorandum (the “Offering Memorandum”) dated 15 November 2019 has been published in relation to the Offering and is available on [x]

· In relation to the offering, Detsky Mir will be conducting a series of investor meetings starting from 18 November 2019

· The bookbuilding period will commence on 18th November 2019 and is expected to close on or about 21 November 2019

· The number of shares to be placed and the offering price will be determined at the close of the bookbuild process, and the results will be announced as soon as practicable thereafter

· Goldman Sachs International, UBS Investment Bank, Sberbank CIB and VTB Capital plc are acting as Joint Global Coordinators and Joint Bookrunners (the “JGCs”)

Via the Offering, RCIF and Sistema look to meaningfully increase the free float and trading liquidity of the Company’s shares in order to further unlock the fundamental value potential of the Company for all Detsky Mir shareholders.

Net proceeds from the offering received by Sistema will be used for general corporate purposes, including potential debt reduction.

Pro-forma for the minimum offering size of 150 million shares, RCIF will retain no more than a 9.7% stake, and Sistema no more than a 36.0% stake, respectively, in the Company.

Shares in Detsky Mir held by RCIF and Sistema which are not sold in the Offering will be subject to a 180-day lock-up, subject to certain customary exceptions.

Kirill Dmitriev, CEO of RDIF and Co-CEO of RCIF, said:

“Detsky Mir has been showing solid performance and good returns, so the Offering is a great opportunity for new high quality investors to become part of the company’s success story. Upon completion of the Offering RCIF will remain a sizeable shareholder of Detsky Mir. We believe in the company's strong business model and expect the value to shareholders to keep growing in the future”.

Hu Bing, Co-CEO of RCIF, said:

“RCIF will remain a sizable shareholder in Detsky Mir. The investment in Detsky Mir has become an important success story for Chinese investment into Russia and demonstrates the strong interest in investing in the country. We expect Detsky Mir to continue expanding its share of the children’s goods and pet markets over the next few years. Detsky Mir is led by a highly experienced management team, and has strong and long-established corporate governance.”


Andrei Dubovskov, President and Chief Executive Officer of Sistema, said:

“Since we began examining options to monetize our stake in Detsky Mir, our goal has always been to ensure that shareholders continue to benefit from Detsky Mir’s strong financial and operational performance. Based on feedback from investors and positive market sentiment, we believe that by increasing the free float of Detsky Mir, we can attract more investors to the Company and enhance liquidity, which benefits all shareholders. As Sistema will remain a significant shareholder, we feel this transaction benefits and further aligns the interests of all key stakeholders. Funds from the transaction will allow Sistema to continue deleveraging and support our investment activities.”


Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Currently, RDIF has experience of the successful joint implementation of more than 70 projects with foreign partners totaling more than RUB1.5 tn and covering 95% of the regions of the Russian Federation. RDIF portfolio companies employ more than 700,000 people and generate revenues which equate to more than 5% of Russia’s GDP. RDIF has established joint strategic partnerships with leading international co-investors from more than 15 countries that total more than $40 bn. Further information can be found at www.rdif.ru

Russia-China Investment Fund (RCIF) is a private equity fund that aims to generate competitive returns by investing in projects that advance bilateral economic cooperation between Russia and China. Further information can be found at www.rcif.com

Sistema PJSFC is a publicly traded diversified Russian holding company serving over 150 million customers in such sectors as telecommunications, high tech, banking, retail, forest products, agriculture, real estate, tourism and healthcare services. The company was founded in 1993. Its revenue in 2018 reached RUB 773.9bn; its total assets equaled RUB 1.5tn as of 31 December 2018. Sistema's global depositary receipts are listed under the symbol “SSA” on the London Stock Exchange. Sistema’s ordinary shares are listed under the “AFKS” ticker on the Moscow Exchange. Further information can be found at www.sistema.com

Detsky Mir Group is a multi-format retailer and Russia’s largest specialized children’s goods retailer. The Group comprises the Detsky Mir retail chain, ELC (Early Learning Centre in Russia) and the ABC retail chains, as well as the Zoozavr pet supplies retail chain. The company operates a network of 710 Detsky Mir stores located in 266 cities in Russia, Kazakhstan and Belarus, as well as 48 ELC and 14 ABC stores as of 30 September 2019. The Zoozavr retail chain comprises eight stores. Total selling space was approximately 794,000 square meters. Further information can be found at www.detmir.ru, www.elc-russia.ru , ir.detmir.ru

For additional information contact:


Arseniy Palagin Andrew Leach / Maria Shiryaevskaya

Russian Direct Investment Fund Hudson Sandler

Press Secretary Tel: +44 (0) 20 7796 4133

Tel: +7 495 644 34 14, ext. 2395

Mobile: +7 916 110 31 41

E-mail: arseniy.palagin@rdif.ru


Jessy Zheng

Russia-China Investment Fund

Beijing, China

Tel.: +86 10 5762 9000

Fax: +86 10 57629111




Yury S. Trofimov

Russia-China Investment Fund

Moscow, Russia

Tel.: +7 (495) 230-05-55 ext. 4243

Mob.: +7 (985) 765-13-12