Fitch might cut Sistema, Mobile TeleSystems

Fitch Ratings said it placed Sistema PJSFC and PJSC Mobile TeleSystems on Rating Watch Negative following a Russian court injunction to freeze significant Sistema assets including its 31.76% stake in Mobile TeleSystems, in relation to claims filed by Rosneft against Sistema.

Rosneft filed claims against Sistema seeking RUB 170.6 billion of damages for alleged abuse of Sistema's shareholding rights in PJSOC Bashneft (BBB-/stable), a medium-sized Russian oil company with legal registration in Russian Republic of Bashkortostan (BBB-/stable) and currently a majority-controlled subsidiary of Rosneft, during the period when Sistema was the majority owner of Bashneft.

The government of Bashkortstan, a shareholder in Bashneft, was accepted as the co-plaintiff.

The hearings on the substance of this case started on June 27.

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