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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, 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 OR THE RUSSIAN FEDERATION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT
Severstal Launches a $450 million Offering of Senior Unsecured Convertible Bonds due 2017
OAO Severstal (“Severstal”; the “Company”) (LSE: “SVST”; MICEX-RTS: “CHMF”) announces the launch of an offering of US$450 million principal amount of senior unsecured convertible bonds due 24 September 2017 (the “Bonds”), subject to an additional increase option of US$50 million. The Bonds are convertible into Global Depositary Receipts (“GDRs”) listed on the London Stock Exchange, each representing one ordinary share of Severstal (the “Offering”). The Bonds will be issued by Holdgrove Limited (the “Issuer”) and will be guaranteed by Severstal (the “Guarantor”).
The net proceeds from the Offering will be used by companies within the Severstal group primarily for the refinancing of their existing indebtedness and for general corporate purposes.
The Bonds are expected to carry a coupon of 1.00 per cent per annum payable semi-annually in arrear, and to have a yield to maturity of between 2.00 and 2.50 per cent per annum. The conversion price is expected to be set at a premium of between 40 and 45 per cent to the reference price (being the higher of the volume weighted average price of a GDR between launch and pricing or US$12.85), as determined at the time of pricing. The conversion price of the Bonds will be subject to standard convertible market anti-dilution adjustments.
The Bonds will be issued at 100 per cent of their principal amount and, unless previously redeemed, converted or cancelled, will mature on 24 September 2017 at the accreted redemption price of between 105.231 and 107.936 per cent of their principal amount. The Issuer will have the option to redeem all of the Bonds at any time after 15 October 2015 at the accreted principal amount at such time together with accrued interest, if the value of the GDRs deliverable on conversion of the Bonds exceeds 140 per cent of the accreted principal amount at such time 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 3rd anniversary of the issue date, at the accreted principal amount at such time plus accrued interest.
Bondholders will have the right 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.
The pricing for the Offering is expected to take place later today and settlement is expected to occur on or around 24 September 2012.
Severstal will make an application for the Bonds to be listed on the PSM segment of the London Stock Exchange some time after settlement of the Offering.
The Bonds will be offered and sold outside the United States in reliance on Regulation S of the US Securities Act 1933, as amended.
Citigroup Global Markets Limited and Deutsche Bank AG, London Branch are acting as Joint Bookrunners and Joint Lead Managers in connection with the Offering.
ОАО Severstal is one of the world’s leading vertically integrated steel and steel related mining companies, with assets in Russia, the USA, the Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal’s ordinary shares are listed on MICEX-RTS and the company’s GDRs are traded on the LSE. Severstal reported revenue of US$7,397 million and EBITDA of US$1,226 million for H1 2012 and US$15,812 million and US$3,584 million for FY 2011 respectively and a net profit of US$2,035 million for FY2011 and of US$582 million for H1 2012. Severstal’s crude steel production in 2011 reached 15.3 million tonnes.
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