Moscow, Russia – 11 February 2005 – Sistema, the largest private sector consumer services company in Russia and the CIS, today announced that it has received notice that the overallotment or ‘greenshoe’ option, which was granted by selling shareholders in Sistema’s initial public offering, has been exercised by the Joint Global Coordinators of the Offering - Credit Suisse First Boston and Morgan Stanley.

The option covers 238,900 additional shares, in the form of 11,945,000 Global Depositary Receipts (GDRs), which is equivalent to approximately 2.5% of the Company’s equity.  As a result of the exercise and upon completion, the free float will increase to approximately 19% of Sistema’s equity or 1,831,563 common shares in the form of 91,578,150 GDRs, with fifty GDRs representing one common share.

At US$ 1.56 billion following the exercise of the overallotment option, Sistema’s Offering is the largest ever initial public offering by a Russian company.

Sistema is the largest private sector consumer services company in Russia and the CIS, with over 35 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$ 4.1 billion for the first nine months of 2004 and total assets of US$ 7.7 billion as at September 30, 2004.  Sistema’s shares are listed under the symbol “AFKS” on the ‘B’ list of the Russian Trading System (RTS) and under the symbol “CUCT” on the ‘B’ list of the Moscow Stock Exchange (MSE).