MTS plans to acquire majority stake in MTS Bank

Of OJSC "Mobile TeleSystems" announced the intention of the MTS Group to acquire a blocking package - up to 25.095% of the share capital - OJSC "MTS-Bank" (up to February 2012 - the Moscow Bank for Reconstruction and Development, IBRD), in accordance with the terms of the indicative MTS offers with the Bank and the Group's controlling shareholder - AFK "System".

In accordance with the indicative offer MTS Group assumes purchase additional shares of MTS Bank, equivalent to 25.095% of its share capital for an amount of up to 5.09 billion rubles. These funds will go to the charter capital of the bank. In the purchase of MTS will be the second largest shareholder of MTS Bank. Will remain the largest shareholder AFK "System", the share of direct ownership which declined to 65.3% from 87.1%, the rest of the capital is owned by a number of shareholders.

Indicative offer is not legally binding. The transaction has received preliminary approval of the Special Committee of independent directors of the board of directors of MTS and MTS Board of Directors, and must go through the corporate approval AFK "System". The deal must also be approved by the Federal Antimonopoly Service (FAS) and the Central Bank of the Russian Federation (Bank of Russia). Issue additional emission MTS Bank must pass the approval of the extraordinary shareholders' meeting.

Fairness opinion to the terms of the deal were provided to the Special Committee of independent directors of MTS independent financial advisor Citigroup Global Markets Limited. Consultants of the Special Committee of independent directors under the deal are Debevoise & Plimpton LLP, Ernst & Young and law firm "line rights."

MTS has also entered into an agreement with MTS Bank to grant him ten subordinated loan in the amount of 2.1 billion rubles under 8.8 per cent per annum, approved by the Bank of Russia. These funds will be used for the development of a joint loan product and MTS MTS Group Bank - "MTS Money." As part of the Bank Agreement with MTS, MTS receives 70% of the profits from the project "MTS Money."