TMKS.L Regulatory News (TMKS)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND 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, RUSSIA, SOUTH AFRICA OR IN 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 SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, RUSSIA, AND SOUTH AFRICA. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

Press Release, 4 February 2010

OAO TMK announces the launch of approximately US$350 million guaranteed convertible bond offering

OAO TMK ("TMK") announces the launch of an offering of approximately US$350 million principal amount of senior unsecured guaranteed convertible bonds (the "Convertible Bonds") due 2015 convertible into Global Depositary Receipts ("GDRs"), each representing four ordinary shares of TMK (the "Offering"). The Convertible Bonds will be issued by TMK BONDS SA (the "Issuer"), a Luxembourg-incorporated special purpose vehicle, and will be initially guaranteed by TMK, OAO Volzhsky Pipe Plant, a production subsidiary of TMK, and ZAO TMK Trade House, a trading subsidiary of TMK. TMK will procure that OAO Seversky Pipe Plant, OAO Sinarsky Pipe Plant, OAO Taganrog Metallurgical Works and IPSCO Tubulars Inc., four additional production subsidiaries of TMK, will provide further guarantees with respect to the Convertible Bonds within 90 days of closing. The proceeds from the Offering will be used to refinance TMK's existing short-term indebtedness.

The aggregate principal amount of the Convertible Bonds to be issued is expected to be US$350 million, subject to the final terms of the Offering. The Convertible Bonds will be convertible into GDRs, each representing four ordinary shares of TMK, and are expected to carry a coupon of 5.0-5.5 per cent. per annum, payable quarterly in arrear, and to be convertible into GDRs at a premium of 27.5-32.5 per cent. above the reference price (the "Conversion Price"), which will be the placing price in a concurrent placement of GDRs conducted in a bookbuilding process on behalf of potential holders of the Convertible Bonds (the "Placing").

The Convertible Bonds will be issued at 100 per cent. of their principal amount and, unless previously redeemed, converted or cancelled, will mature on the fifth anniversary of the issue, in 2015. Bondholders will have the right to convert their bonds into GDRs of TMK at any point following 41 days after the closing date and before the close of business on the seventh day prior to the final maturity date or, if earlier, ending on the seventh day prior to any earlier date fixed for redemption of the Convertible Bonds. TMK will have the option to redeem the Convertible Bonds after three years from issuance at the principal amount together with accrued interest, if the volume weighted average price of the GDRs traded on the London Stock Exchange exceeds 130 per cent. of the Conversion Price on each of at least 20 dealing days out of 30 consecutive dealing days ending not earlier than five days prior to the notice of redemption. The Issuer will also have the option to call the Convertible Bonds at par plus accrued interest, if 15% or less of the Convertible Bonds remain outstanding. Bondholders will have the right to request redemption of the bonds on the third anniversary following the issue date at the principal amount plus accrued interest. Bondholders will also have puts for, inter alia, certain changes of control, delisting and the failure by TMK to procure further guarantees for the Convertible Bonds from its four additional production subsidiaries, all as more fully described in the terms and conditions of the Convertible Bonds.

In connection with the launch of the Offering, TMK expects to announce a capital increase of its charter capital by way of open subscription (the "Capital Increase") for up to 86,166,871 additional ordinary shares, including the placement of shares to TMK Steel Limited, an indirect majority shareholder of TMK (the "Controlling Shareholder"), through the exercise of the Controlling Shareholder's pre-emptive right in connection with such Capital Increase, at a price per share to be determined based on the reference price of the Offering by the Board of Directors at or around 5 February 2010.

The pricing for the Offering is expected to take place later today or tomorrow and settlement is expected to occur on or around 11 or 12 February 2010.

TMK has made an application to list the Convertible Bonds on the Official List of the UKLA and for the Convertible Bonds to trade on the EEA Regulated Market of the London Stock Exchange.

Initially, the Controlling Shareholder and Rockarrow Investments Limited, a subsidiary of TMK, will lend sufficient GDRs to form the aggregate conversion property of the Convertible Bonds. The Controlling Shareholder is expected to participate in the Capital Increase, which will be sized such that the Controlling Shareholder's loan of GDRs can be satisfied through the replenishment of ordinary shares.

There will be a lock up from the date of pricing to 90 days after the closing date for the Issuer, the Guarantors, the Controlling Shareholder and their respective subsidiaries and controlled affiliates (subject to customary exceptions).

Morgan Stanley, UBS Investment Bank and VTB Capital are acting as Joint Bookrunners in connection with the Offering and the Placing.

For more information please contact:

Mr. Vladimir V. Shmatovich, Deputy CEO, Strategy and Business Development

Tel. +7 495 775 7600

Mr. Alexei A. Ratnikov, Investor Relations Director

About TMK (LSE: TMKS):

TMK is one of the world's leading manufacturers and suppliers of steel pipes for the oil and gas industry. The company operates 21 production sites in Russia, the United States, Romania, and Kazakhstan, with aggregate annual production capacity of approximately 6.5 million tonnes, including over 2 million tonnes of OCTG capacity. TMK has a strong international presence and delivers its products to customers in more than 65 countries. In 2009, TMK shipped over 2.8 million tonnes of pipe products.

TMK's ordinary shares are listed on the RTS and MICEX Stock Exchanges in Russia and its GDRs are traded on the London Stock Exchange.

For further information please visit:

www.tmk-group.com

Important Notice:

THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THE SECURITIES REFERRED TO HEREIN IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION, EXEMPTION FROM REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF, U.S. PERSONS, NOR MAY THE SECURITIES MENTIONED HEREIN BE OFFERED OR SOLD IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OF, U.S. PERSONS ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION AS PROVIDED IN THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER. THERE IS NO INTENTION TO REGISTER ANY PORTION OF THE OFFERING MENTIONED HEREIN IN THE UNITED STATES OF AMERICA OR TO CONDUCT A PUBLIC OFFERING OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES OF AMERICA.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF SECURITIES TO THE PUBLIC IN THE UNITED KINGDOM. CONSEQUENTLY, THIS ANNOUNCEMENT IS DIRECTED ONLY AT (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM OR (II) PERSONS WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), (III) HIGH NET WORTH ENTITIES FALLING WITHIN ARTICLE 49(2) OF THE ORDER AND (IV) OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). ANY INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES WILL ONLY BE AVAILABLE TO, AND WILL ONLY BE ENGAGED WITH, RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS ANNOUNCEMENT OR ANY OF ITS CONTENTS.

THIS ANNOUNCEMENT COMPRISES AN ADVERTISEMENT FOR THE PURPOSES OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE") AND HAS BEEN PREPARED SOLELY IN CONNECTION WITH THE OFFERING. A FINAL PROSPECTUS IN CONNECTION WITH THE ADMISSION OF THE NOTES TO THE OFFICIAL LIST OF THE UK LISTING AUTHORITY AND TO TRADING ON THE LONDON STOCK EXCHANGE'S REGULATED MARKET WILL BE PUBLISHED IN DUE COURSE. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF THE INFORMATION IN THE PROSPECTUS, WHICH WHEN AVAILABLE WILL BE PUBLISHED IN ACCORDANCE WITH THE PROSPECTUS DIRECTIVE.

COPIES OF THIS ANNOUNCEMENT ARE NOT BEING MADE AND MAY NOT BE DISTRIBUTED OR SENT INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN, RUSSIA OR SOUTH AFRICA.

IN CONNECTION WITH THE SALE OF SECURITIES REFERRED TO HEREIN, ONE OR MORE PARTIES NAMED AS THE STABILISING MANAGER(S) (OR PERSONS ACTING ON BEHALF OF ANY STABILISING MANAGER(S)) MAY OVER‑ALLOT SECURITIES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE SECURITIES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISING MANAGER(S) (OR PERSONS ACTING ON BEHALF OF ANY STABILISING MANAGER(S)) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE SECURITIES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE SECURITIES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE SECURITIES. ANY STABILISATION ACTION OR OVER‑ALLOTMENT MUST BE CONDUCTED BY THE RELEVANT STABILISING MANAGER(S) (OR PERSON(S) ACTING ON BEHALF OF ANY STABILISING MANAGER(S)) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.