PAO Severstal: Clarification regarding the coupon payment for the Eurobond 2024

Clarification regarding the coupon payment for the Eurobond 2024

 PAO Severstal (MOEX: CHMF; LSE: SVST) (the 'Company') informs that the regular coupon payment in the amount of US$12,600,000 under its US$800,000,000 3.15 % Loan Participation Notes due 2024 (the 'Notes') issued by Steel Capital S.A. (Luxembourg) (the 'Issuer') is due on 16 March 2022.

The Company is committed to fulfill its obligations under the loan agreement with the Issuer in order to secure the fulfilment of the Issuer's obligations under the Notes in accordance with their terms. We have received a permission from the competent Russian authorities to pay to the Issuer the interest in U.S. dollars under the respective loan relating to the Notes (the 'Loan') and have conducted consultations with the parties involved in the payment settlement process. At the moment we certify that there are no obstacles from Russian law side for the Company to make the payment under the Loan in order for the Issuer to discharge the coupon payment under the Notes. However, given the recent developments around the Company, we have grounds to believe that Citibank, N.A., London Branch, acting as Principal Paying and Transfer Agent and the Account bank in respect of the Notes, may refrain from processing the payment initiated by the Company in accordance with the terms of the Loan and the Notes documentation.

The Company is ready to make the required payment in accordance with the terms of the Loan and has allocated the full U.S. dollar amount of respective interest payment to enable the Issuer to discharge the Issuer's obligations to pay the coupon in accordance with the Notes documentation. 

Despite the anticipated limitations that are outside the Company's control, as a reliable borrower and in the effort to protect the rights of the Noteholders, on 16 March 2022 the Company made a test payment in respect of the interest due from it under the Loan amounting to 1% of the Notes coupon. In case this payment is processed in accordance with the terms of the Loan and the Notes documentation, the Company intends to proceed with transferring the remaining part of the interest amount to the relevant account of the Issuer for further distribution to the Noteholders in discharge of the Issuer's obligation to pay the coupon. In case the test payment fails, the Company will pursue the alternative options available to it to deliver the interest under the Loan to the Issuer so as to enable the Issuer to fulfil its obligations under the Notes documentation and will inform Citibank N.A., London Branch (as Trustee in respect of the Notes) and the Noteholders accordingly.

For further information, please contact:

Severstal Investor Relations

Vladimir Zaluzhsky, Nikita Klimantov

T: +7 (495) 926-77-66

vladimir.zaluzhsky@severstal.com; na.klimantov@severstal.com

Severstal Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66

anastasia.mishanina@severstal.com

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PАО Severstal is one of the world's most efficient metals and mining companies, working with customers and partners to create new products and integrated solutions from steel. The company's assets are located in Russia, Latvia and Poland. Severstal is listed on MOEX and the company's GDRs are traded on the LSE. Severstal reported revenue of $11.6 million and EBITDA of $6 bln in 2021. Severstal's crude steel production in 2021 reached 11.6 million tonnes.