SVST.L Regulatory News (SVST)

8 Nov 2006 07:02

OAO Severstal08 November 2006 NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN This press release is not a prospectus but an advertisement. Investors shouldnot subscribe for any transferable securities referred to in this announcementexcept on the basis of information in the prospectus to be published by OAOSeverstal in connection with the admission of GDRs representing OAO Severstal'sshares to the Official List of the Financial Services Authority For Immediate Release 8 November 2006 OAO SEVERSTAL ANNOUNCES PRICING OF GLOBAL OFFERING AT US$12.50 PER SHARE AND GDR OAO Severstal ("Severstal") today announces the pricing of its Global Offering("the Offering") of ordinary shares and Global Depositary Receipts ("GDRs")representing interests in its ordinary shares. • The Global Offering has been priced at the higher end of the announcedprice range at US$12.50 per share and GDR, implying a market capitalisation ofSeverstal of approximately US$12.70 billion. • Strong, high quality institutional demand was received across allregions in which the shares and GDRs were offered. • A total of 85 million existing ordinary shares, including ordinaryshares in the form of GDRs were allocated to international institutionalinvestors, including to qualified institutional buyers in the United Statesunder Rule 144A, representing approximately 9.1% of Severstal's outstandingshares (excluding the over-allotment option of up to 12.75 million GDRs) andcorresponding to a total offer size of approximately US$1.063billion. The sharesare being offered by Frontdeal Ltd. ("Frontdeal"), an entity under the controlof Severstal's controlling shareholder. • The seller will use the majority of the proceeds of this Offering tosubscribe (directly and through other entities under control of Severstal'scontrolling shareholder) for newly-issued shares in the capital increase ("Capital Increase") to be conducted by Severstal after the settlement of theOffering by way of open subscription for up to 85 million newly issued shares.Following the completion of the Capital Increase, and assuming the full exerciseby Frontdeal and other entities under the controlling shareholder's control oftheir statutory pre-emption rights to subscribe for newly-issued shares,Severstal is expected to raise gross proceeds of up to approximately US$1.043billion. • Severstal intends to use the proceeds of the Capital Increase tocontinue improving the quality of its production facilities and improveoperating efficiencies throughout its global operating platform, and to takeadvantage of potential opportunities to expand its core business in line withits corporate strategy, including the funding of potential acquisitions ofassets and participation in joint ventures. • Conditional dealings will commence on the London Stock Exchange at 08:00 today. Admission to the Official List of the UK Listing Authority ("Admission") is expected at 08:00 on 14 November 2006. The GDRs will be listed on theLondon Stock Exchange under the symbol "SVST". The ordinary shares are alreadylisted on the RTS and MICEX stock exchanges in Moscow, Russia. • Citigroup, Deutsche Bank and UBS Investment Bank are Joint GlobalCoordinators and Joint Bookrunners for the Global Offering. Commenting on today's announcement, Alexey Mordashov, CEO of Severstal'smanagement company, said: "The success of the Offering supported by our new corporate governancearrangements demonstrates significant endorsement of Severstal amonginternational investors and the Russian steel sector. The Offering has given usaccess to capital which we will use to enhance our opportunities for growth andvalue creation aiming to be a leader in the consolidating global steel industry." - Ends - Enquiries: Severstal +7 495 540 7766 Dmitry Druzhinin, Investor RelationsOlga Antonova, Public Relations Citigate Dewe Rogerson +44 20 7638 9571 Andrew HeyTom BaldockMarina Zakharova NOTES TO EDITORS Severstal's business: Severstal's vertical integration, focus on high value-added products,substantial modernisation of operations and recent geographic expansion throughattractive acquisitions have enabled it to leverage cost synergies and generatestronger cash flows and earnings. Severstal seeks to actively enhance itsproduct portfolio with new products to meet customer demand for high qualityflat products in Russia and the United States, particularly in the automotiveindustry, niche products in Russia, including large diameter pipes and wiredrawn products, and specialty and high value products in Europe, includingspecial bars and wire rods produced by Lucchini. Further information about Severstal is available at www.severstal.com This press release does not constitute or form part of any offer or invitationto sell, or any solicitation of any offer to purchase nor shall it (or any partof it) or the fact of its distribution, form the basis of, or be relied on inconnection with, any contract therefore. The offer and the distribution of thispress release and other information in connection with the listing and offer incertain jurisdictions may be restricted by law and persons into whose possessionany document or other information referred to herein comes should informthemselves about and observe any such restriction. Any failure to comply withthese restrictions may constitute a violation of the securities laws of any suchjurisdiction. This communication is only directed at (i) persons who are outside the UnitedKingdom or (ii) investment professionals falling within Article 19(5) of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it maylawfully be communicated, falling within Article 49(2)(a) to (d) of the Order(all such persons together being referred to as "relevant persons"). The offeredsecurities are only available to, and any invitation, offer or agreement tosubscribe, purchase or otherwise acquire such securities will be engaged in onlywith, relevant persons. Any person who is not a relevant person should not actor rely on this communication or any of its contents. Stabilisation/FSA Any offer of securities to the public that may be deemed to be made pursuant tothis communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State,the "Prospectus Directive") is only addressed to qualified investors in thatMember State within the meaning of the Prospectus Directive. This press release is not an offer for sale of any securities of Severstal inthe United States including its territories and dependencies, any state of theUnited States and the District of Columbia. No securities of Severstal havebeen, or will be, registered under the US Securities Act 1933, as amended, andsecurities may not be offered or sold in the United States absent registrationor an exemption from registration under the U.S. Securities Act of 1933, asamended. Information contained in this press release does not constitute anoffer or an advertisement of any securities in the Russian Federation. The GDRshave not been and will not be registered in the Russian Federation and are notintended for "placement" or "public circulation" in the Russian Federation. This information is provided by RNS The company news service from the London Stock Exchange