NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.

Press release

15 August 2022

LAUNCH OF NOTEHOLDERS’ CONSENT SOLICITATIONS

Novolipetsk Steel (“NLMK”) highlights the announcement made by Steel Funding D.A.C. (the “Issuer”) on 12 August 2022 on the launch of consent solicitation processes (the “Consent Solicitations”) for each of its outstanding U.S.$700,000,000 4.50 per cent. loan participation notes due 2023 (“2023 Notes”), U.S.$500,000,000 4.00 per cent. loan participation notes due 2024 (“2024 Notes”), U.S.$500,000,000 4.70 per cent. loan participation notes due 2026 (“2026 USD Notes”) and EUR500,000,000 1.45 per cent. Loan Participation Notes due 2026 (“2026 EUR Notes”, and together with 2023 Notes, 2023 Notes and 2026 USD Notes, the “Notes”).

Capitalised terms used in this announcement but not defined herein have meanings given to them in the relevant Issuer’s Consent Solicitation Memoranda dated 12 August 2022 (each, a “Memorandum”). Copies of each Memorandum and certain other documents related to the Consent Solicitations (the “Consent Documents”) can be obtained by registering on the Consent Solicitations Website at https://www.i2capmark.com/event-details/69/Holder/nlmk-steel-funding-dac-consent-solicitation. 

Details of Notes in respect of which consent of Noteholders is sought

Outline of proposals

Amendments to Note documents proposed by the Issuer, among other matters, seek to enable NLMK to make direct payments to the holders of the Notes in Russian depositaries, waive payments under the notes held by NLMK or other members of its group and cancel Notes held by the group without the need to deliver them to the Registrar (which delivery is currently in many instances impossible if the Notes are held with a Russian depositary). Other amendments are more technical and are aimed at ensuring that the Issuer is able to operate and service its debt if certain services cease to be available to it or if it or NLMK is unable to make payments in the currency of the Notes.

Additionally, in order to have more time to implement the above proposals before the due dates for interest payments under certain Notes, by way of separate resolutions, the Issuer is seeking from the holders of 2023 Notes, 2024 Notes and 2026 USD Notes a consent to waive any breaches of Note documentation resulting from the Issuer’s failure to pay interest on the relevant Notes on or before 31 December 2022.

Expected Timetable for Consent Solicitations

• Commencement of the Consent Solicitations – 12 August 2022.
• Record Date for the Meetings – 23 August 2022.
• Voting Deadline for 2024 Notes and 2026 USD Notes – 1 September 2022 (4:00 p.m. (London time)).
• Voting Deadline for 2023 Notes and 2026 EUR Notes – 7 September 2022 (4:00 p.m. (London time)).
• Meetings for 2024 Notes and 2026 USD Notes – 3 September 2022 (4:00 p.m. and 4:45 p.m. (London time), respectively).
• Meetings for 2023 Notes and 2026 EUR Notes – 9 September 2022 (4:00 p.m. and 4:45 p.m. (London time), respectively).

The above timeline is indicative and may change.

Participation in Consent Solicitations

To participate in the relevant Consent Solicitation, a Noteholder should deliver a valid Voting Instruction to the Information and Tabulation Agent by no later than the Voting Deadline. Only Noteholders that are not Sanctions Restricted Persons and who hold the relevant Notes as of the Record Date may submit a Voting Instruction.

Quorum and approval

The quorum required for an Extraordinary Resolution to be considered at a Meeting will be one or more persons holding Notes or being proxies or representatives and holding or representing not less than two-thirds of the principal amount of the Notes for the time being outstanding (or one-half of it should the Meeting be adjourned). Affirmative vote of at least two-thirds of such quorum will be required to approve the proposals contained in the Extraordinary Resolutions. Such proposals, if approved by a Meeting, will be binding on all the Noteholders, whether or not present at the Meeting or voting in favor of the proposals.

No consent fee is payable in connection with the Consent Solicitation.

Announcements, documents and queries

Announcements in connection with the Consent Solicitations will be disclosed by the Issuer on the website of the Euronext Dublin. Copies of all announcements, notices and press releases, as well as certain documents related to Consent Solicitations are available upon registration on the Consent Solicitations Website https://www.i2capmark.com/event-details/69/Holder/nlmk-steel-funding-dac-consent-solicitation.

Questions and requests for assistance in connection with the Consent Solicitations should be directed to i2 Capital Markets (“Information and Tabulation Agent”) at nlmkconsent@i2capmark.com and at +44 203 633 1212.

Questions and requests for assistance in connection with the Consent Solicitations may also be directed to the Corporate finance and IR department of NLMK Group at ir@nlmk.com and at +7 495 504 0 504 (ext. 227).

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world.

NLMK Group’s steel products are used in various industries, from construction and machine building to the manufacturing of power-generation equipment and offshore wind turbines.

NLMK operates production facilities in Russia, Europe, and the United States. The Company’s steel production capacity exceeds 18 million tonnes per year.

NLMK’s ordinary shares with a 20.7% free-float are traded on the Moscow Stock Exchange (ticker “NLMK”) and its global depositary shares are traded on the London Stock Exchange (ticker “NLMK:LI”). The share capital of the Company is divided into 5,993,227,240 shares with a par value of RUB1.

For more information about NLMK Group, please visit our website.

DISCLAIMER

This announcement must be read in conjunction with, and is qualified by, the Consent Documents. This announcement and the Consent Documents contain important information which should be read carefully before any decision is made with respect to the Consent Solicitations. If any Noteholder is in any doubt as to the action it should take or is unsure of the impact of its participation in the relevant Consent Solicitation, it is recommended to seek its own advice, including in respect of any tax consequences, immediately from its stockbroker, bank manager, solicitor, accountant or another independent adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to participate in the relevant Consent Solicitation.

None of NLMK, the Issuer, the Information and Tabulation Agent and/or the Trustee or their respective directors, officers, employees, affiliates, advisers or agents makes any recommendation as to whether Noteholders should provide their Consent, or refrain from taking any action in the Consent Solicitation with respect to their Notes, and none of them has authorised any person to make any such recommendation. The Information and Tabulation Agent is the agent of the Issuer and owes no duty to any Noteholder.

This announcement is for informational purposes only. The Consents are only being solicited pursuant to the Memoranda and only in such jurisdictions as is permitted under applicable law.

Forward-looking statements

This announcement may contain “forward-looking statements” concerning NLMK and/or NLMK group. Generally, the words “will”, “may”, “should”, “could”, “would”, “can”, “continue”, “opportunity”, “believes”, “expects”, “intends”, “anticipates”, “estimates” or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of NLMK and/or NLMK group’s operations. Many of these risks and uncertainties relate to factors that are beyond NLMK and/or NLMK group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. NLMK and/or any NLMK group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.