Sistema Cancels Detsky Mir Share Offering Due to Court Order

By Carlo MartuscelliFeaturesDow Jones Newswires

Sistema JSFC (AFKS.MZ) said Wednesday that it has had to cancel a share offering, which it had previously said was completed, in its subsidiary Detsky Mir PJSC (DSKY.MZ) as a result of a court injunction freezing all of Sistema's shares in the children's retailer.

Russian conglomerate Sistema said earlier Wednesday that a court in the Russian region of the Republic of Bashkortostan had frozen a number of its assets at the request of Rosneft Oil Co. (ROSN.MZ) and its subsidiary Bashneft (BANE.MZ).

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"The majority of participants in the offering are leading international investors," the company said. "The claims and actions of Rosneft and Bashneft have thus put obvious obstacles to the inflow of new foreign investments into the Russian economy."

Sistema said on Dec. 12 that it had successfully completed an offering for 46.5 million shares in Detsky Mir, equaling 6.3% of the company's capital. As part of the offering, Sistema sold 33.6 million of its shares in Detsky Mir--amounting to a 5% stake in the company--for 3.3 billion rubles ($55.9 million). These shares will now not be sold.

On Dec. 7 Rosneft and Bashneft filed a lawsuit against Sistema JSFC for damages totaling 131.64 billion rubles over dividend payments made by Bashneft--now owned by Rosneft--to Sistema, from 2009 to 2014. The asset freeze is a consequence of this lawsuit.

Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

December 13, 2017 11:15 ET (16:15 GMT)