13 Dec 2017 13:24

Court seizes AFK Sistema Detsky Mir stake, bans registrar from making changes to personal account

MOSCOW. Dec 13 (Interfax) - The Bashkortostan Court of Arbitration granted a Rosneft and Bashneft plea to take injunctive measures over the 131.6 billion ruble lawsuit against AFK Sistema and JSC Sistema-Invest.

The court has seized the 52.09% stake in Detsky Mir held by Sistema with a balance sheet-value of 33.8 billion rubles, the court order said. Detsky Mir's registrar has been forbidden from making any changes to Sistema's personal account in the register of shareholders. At the same time the court decided to "restrict the rights" of Sistema to received income on seized assets.

The seizure of Sistema's Detsky Mir stake creates uncertainty surrounding the deal in which AFK and the Russia-China Investment Fund (RCIF) sold 6.3% of their shares in the company in an accelerated book-build. Sistema announced the sale late on December 11 and the results were given in the morning on December 12. Sistema sold 5% of Detsky Mir in the deal, reducing its stake from 52.1% to 47.1%. However, the court ruling taken on the same day is fixed at Sistema's "former" stake in the company.

The deal is considered closed once all settlements have been completed, which as a rule takes place within a few days of the book build in SPO deals. The procedure is usually a technical one. Sistema did not mention a settlement date in its announcement about the sale of the shares.

Sistema itself is not yet commenting on the reduction of its stake in the SPO against the backdrop of the court ruling. Sistema's spokesman, Sergei Kopytov, described the ruling to seize assets as "another example of Bashkirian justice."

Earlier on Tuesday, before news had broken about the plea by Rosneft and Bashneft to grant injunctive relief, Sistema asked Bashkortostan's Arbitration Court to hold a hearing to review a that plea. When the first lawsuit was filed against Sistema in June, the decision to apply injunctive measures adopted without hearing the positions of the sides.

The Russia-China Investment Fund, the other party in the Detsky Mir SPO, has not yet commented.