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Financial Corporation "Sistema"

December 10, 2007

Call option exercised

Moscow, Russia - December 10, 2007 - "COMSTAR - United TeleSystems" today announced that Access Telecommunications Co?peratief U.A. (previously known as 2711 Centerville Co?peratief U.A.) has initiated the process of exercising its call option to purchase 46,232,000 Comstar shares from MGTS Finance S.A. for US$ 6.97 per share and a total cash consideration of US$ 322.2 million.

The shares to be purchased represent 11.06% of the total number of issued and outstanding Comstar shares. The transaction is expected to be completed, by means of the transfer of rights and payment, within 10 days from December 7, 2007.

The call option was originally issued by Comstar subsidiary MGTS Finance S.A. to 2711 Centerville Co?peratief U.A. in part payment for the acquisition of a 25% + 1 share stake in Telecommunications Investment company ‘Svyazinvest' in December 2006. Access Telecommunications Co?peratief U.A. retains a put option to sell the shares back to MGTS Finance S.A. at any time over the next twenty four months, at the trailing ninety trading day weighted average price of the Comstar Global Depositary Receipt.

The call and put option is revalued at the end of each quarterly reporting period and the change in value over the three months is reported in the Company's income statement. The call element of the option has now been revalued for the last time and will have no further impact on the Company's accounts. The Company's results for the fourth quarter of 2007 will therefore be impacted both by a non-cash gain of approximately US$ 55.8 million arising from the revaluation of the call and put option as at market close on December 7, 2007, as well as by the yet to be determined change in value of the put option over the remaining few weeks of the quarter. The revaluation of the instrument reflects the decrease in the market price of the Comstar GDR from US$ 12.95 on September 30, 2007 to US$ 11.80 on December 7, 2007. The change in value of the remaining put option will be far less volatile and have far less impact moving forward.

 

 

 

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