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THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR FROM THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, SOUTH AFRICA, JAPAN, THE RUSSIAN FEDERATION, CYPRUS OR INTO OR FROM ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE, NOR A SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, CYPRUS OR THE RUSSIAN FEDERATION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT
Press Release: 9th February 2017
PAO Severstal announces the placing of U.S.$250 million Senior Unsecured Convertible Bonds due 2022 to be issued by Abigrove Limited and guaranteed by PAO Severstal
PAO Severstal (“Severstal” or the “Company”) (LSE: “SVST”; MICEX-RTS: “CHMF”) has completed the offering (the “Offering”) of U.S.$250 million principal amount of senior unsecured guaranteed convertible bonds due 2022 (the “Bonds”). The Bonds will be issued by Abigrove Limited (the “Issuer”), a wholly-owned subsidiary of Severstal incorporated under the laws of the Republic of Cyprus, and will be guaranteed by the Company. The Bonds are, subject to a cash settlement option at the discretion of the Issuer, convertible into Global Depositary Receipts (“GDRs”) of Severstal listed on the London Stock Exchange, each representing one ordinary share of Severstal.
The Bonds will not pay any coupon (zero-coupon). The initial conversion price has been set at U.S.$20.33 per GDR, representing a conversion premium of 35 per cent. above the reference price of U.S.$15.06 (being the volume weighted average price of a GDR between launch and pricing of the Bonds on 9th February 2017). The conversion price of the Bonds will be subject to standard convertible market anti-dilution adjustments.
The Bonds will be issued and redeemed at 100 per cent. of their principal amount and, unless previously redeemed, converted or cancelled, will mature on 16th February 2022. The Issuer will have the option to redeem all of the Bonds at any time after 9th March 2020 at their principal amount, if the value of the GDRs deliverable on conversion of the Bonds exceeds 130 per cent. of the principal amount of the Bonds over a specified period. Holders of the Bonds will have the option to require an early redemption of their Bonds on the third anniversary of the issue date, at their principal amount.
Bondholders will have the right, subject to a cash settlement option at the discretion of the Issuer, to convert their bonds into GDRs of Severstal at any point from 41 days after the issue date up to the close of business on the seventh dealing day prior to the final maturity date or if the Bonds shall have been called for redemption prior to the final maturity date, the date falling seven dealing days prior to the date fixed for redemption.
Severstal will make an application for the Bonds to be admitted to trading on the Open Market segment (Freiverkehr) of the Frankfurt Stock Exchange after settlement of the Offering.
The net proceeds of the issue will be used for the general corporate purposes of Severstal.
The settlement of the Offering is expected to occur on or around 16th February 2017.
Concurrently the Company has announced on 9th February 2017 the launch of a Eurobond roadshow starting on 10th February 2017 and ending on 15th February 2017. Following the Eurobond roadshow, and subject to market conditions, the Company could launch a benchmark Eurobond offering.
Citigroup Global Markets Limited, Deutsche Bank AG, London Branch, J.P. Morgan Securities plc and Société Générale Corporate & Investment Banking are acting as Joint Bookrunners and Joint Lead Managers in connection with the Offering.
The existing stock lending arrangements between certain of the Joint Bookrunners, the Company and/or affiliates will continue to be available during the life of the Bonds for the purposes of facilitating investors’ hedging activities.
For more information, please contact:
Severstal Public Relations
Tel: +7 (495) 926 7766
PAO Severstal is one of the world’s largest vertically integrated steel and steel-related mining companies with its assets in Russia, Ukraine, Latvia, Poland and Italy. The company’s shares are listed at the Russian trading floor MICEX-RTS, global depository receipts are presented on the London Stock Exchange. Severstal reported revenue of $5,916 million and EBITDA of $1,911 million in 2016. Severstal’s crude steel production in 2016 reached 11.6 million tonnes.
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