Public Tender Offer
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Dear Shareholders,
This section of the website is addressed to the holders of Severstal
ordinary shares and provides them with the documents on the transfer and cancellation of the quasi-treasury shares of OAO Severstal received as a result
of Nordgold share exchange through a tender offer open to all Severstal
shareholders.
As a result of the share exchange deal between Severstal and Nordgold,
Lybica Holding B.V., a 100% subsidiary of Severstal, acquired approximately 193 million Severstal shares which effectively became quasi-treasury shares.
Severstal announced its intention to cancel 170 million quasi-treasury shares
owned by Lybica Holdings B.V. and to retain the remaining 23 million
quasi-treasury shares for general corporate purposes of Severstal. Under
Russian law, a subsidiary cannot cancel shares of the parent company (JSC Severstal). In this context, the decision has been taken to reduce the Severstal share capital via buyback of shares through a tender offer (“Offer”)
open to all Severstal shareholders, including its subsidiaries which own quasi-treasury shares.
On 10 April 2012, the EGM of Severstal approved the resolution of the Board
of Directors. Hence the Offer will be open for acceptances from 21 May 2012 to
19 June 2012 with settlement expected in early July 2012. The proposed Offer
price is RUB 390 per share, based on the average mid-market closing price for the Severstal shares over the 120 days to 24 February 2012. The Offer is open
to all eligible shareholders. Other details of the Offer are available in the
materials at this website or at our partners (please see their contacts below).
For ordinary shares owners there is also a phone hot line (free of charge for calls within Russia) 8−800−100−39−64 and two centers for shareholder requests
in Moscow and Cherepovets. Below on the page you can find answers to some of
basic questions on the Offer.
Contacts for ordinary shares owners:
National “Hot line”: 8−800−100−39−64;
Centres for shareholder requests:
- Moscow: Trubnaya Street, 21, 3rd entrance, 3rd floor, phone:
8−495−961−24−82;
- Cherepovets: phone: 8−8202−53−22−97.
Link to the website of ZAO Invest Telecom which consults owners of ordinary shares of OAO Severstal:
http://www.invest-telekom.ru/.
Contacts for GDR holders:
Deutsche Bank Trust Company Americas
Ms. Beverly George
Email:
beverly.a.george-ny@db.com
Phone: +1 (212) 250−1504.
Answers to some basic questions on the Offer and cancellation of Severstal
shares:
- What is the rationale behind the Offer and cancellation of shares?
As a result of the share exchange between Severstal and Nordgold, Lybica Holding B.V., a 100% subsidiary of Severstal, acquired
approximately 193 million Severstal shares which effectively became
quasi-treasury shares. Severstal announced its intention to cancel the majority
ofquasi-treasury shares owned by Lybica Holding B.V. and to retain the remaining 23 million quasi-treasury shares for general corporate purposes of Severstal. Under Russian law, a subsidiary cannot cancel shares of the parent
company (JSC Severstal). In this context, the decision has been taken to reduce
the Severstal share capital via buyback of shares through a tender offer
(“Offer”) open to all Severstal shareholders, including its subsidiaries which
own quasi-treasury shares.
- How much will shareholding in Severstal increase post cancellation
of shares for those shareholders who did not participate in the
Offer?
By approximately 20%.
- Why are the Offer and cancellation announced for 170 million
shares?
Severstal has earlier announced its intention to cancel
the majority of shares received by Lybica Holding B.V. as a result of the share
exchange between Severstal and Nordgold. If Lybica Holding B.V. (or any other
Severstal subsidiary, to which Lybica Holding B.V. will transfer Severstal
quasi-treasury shares) is able to tender 170 million shares, it will end up
with approximately 23 million shares, which, according to Severstal’s
management, is sufficient for general corporate needs of the group.
- What is the effect of the Offer on the share price of Severstal?
The Offer and further cancellation of shares are financially neutral for the Severstal share price. At the same time, the Offer
may be positively perceived by the market, highlighting that, firstly,
Severstal has fulfilled its previously announced intention, and, secondly, it clarifies the use of 170 million quasi-treasury shares owned by the
subsidiary.
- Who can participate in the Offer?
Under Russian law,
holders of Severstal ordinary shares are allowed to participate in the Offer
taking into account the restrictions in foreign jurisdictions which may be
imposed on the non-resident shareholders in Russia. The possibility and terms
of participation in the Offer for Severstal GDR holders will be separately
communicated by the depositary bank (“Deutsche Bank Trust Company Americas”)
which is responsible for consulting GDR holders.
- 6. What happens if more than 170 million shares are tendered
into the Offer?
If Severstal receives acceptances for more than
170 million shares, they will be satisfied pro rata to the number of Severstal
shares tendered into the Offer.
- What happens to the shares which will not be accepted for pro rata
buyback under the Offer?
Each shareholder is expected to transfer
such a number of shares which is calculated on the basis of the original number
of shares tendered in the application and the published pro rata ratio. The shares which are not accepted for pro rata buyback under the Offer will not be
acquired and will remain on the personal account of the shareholder.
- How was the purchase price for the shares
determined?
According to the terms of the Offer, the purchase
price is RUB390 per Severstal share, based on the average mid-market closing
price calculated over the 120−day period preceding February 24, 2012.
- Where can I find the terms of participation in the
Offer?
Holders of ordinary shares can obtain full details about the terms of participation in the Offer in the Offer Memorandum that will be published on Severstal’s website (www.severstal.com)
before 20 April 2012 and will be available for review at ZAO Invest Telecom
which is responsible for consulting holders of Severstal ordinary shares. GDR holders can obtain information on the Offer from the Notice to GDR holders that will be distributed by Deutsche Bank Trust Company Americas not later than 20
April 2012 and will be available for review at Deutsche Bank Trust Company
Americas which is responsible for consulting holders of Severstal GDRs.
