Steel Funding Ltd announces result of Tender Offer

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION TO ANY PERSON LOCATED OR RESIDENT IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. OTHER RESTRICTIONS APPLY.

9 June 2016

Steel Funding Limited (the "Offeror") announces the results of its invitation to eligible holders of its outstanding U.S.$800,000,000 4.45 per cent. Loan Participation Notes due 2018 (U.S.$707,585,000 outstanding principal amount, Regulation S: Common Code: 080863284, ISIN: XS0808632847; Rule 144A: Common Code: 078395052, ISIN: US85812PAB94, CUSIP: 85812PAB9) and the U.S.$500,000,000 4.95 per cent. Loan Participation Notes due 2019 (U.S.$470,714,000 outstanding principal amount, Regulation S: Common Code: 078393432, ISIN: XS0783934325; Rule 144A: Common Code: 061917110, ISIN: US85812PAA12, CUSIP: 85812PAA1) (each of the series of Notes, a "Series", and all outstanding notes of all Series together, the "Notes"), issued by it for the purpose of financing corresponding loans to Novolipetsk Steel ("NLMK"), to tender their Notes for purchase by the Offeror for cash (each such invitation, an "Offer" and, together, the "Offers") at a purchase price equal to U.S.$1,036.25 per U.S.$1,000 in principal amount of the 2018 Notes and U.S.$1,045.00 per U.S.$1,000 in principal amount of the 2019 Notes, plus Accrued Interest.

Capitalised terms used in this announcement but not otherwise defined have the meanings given to them in the tender offer memorandum dated 31 May 2016 (the "Tender Offer Memorandum").

The Offers expired at 13:00 hours, London time, on Wednesday 8 June.

The Offeror has accepted for purchase the Notes as set out in the table below:

The Financing Condition described in the Tender Offer Memorandum is expected to be satisfied. Subject to the satisfaction of the Financing Condition the Settlement Date is expected to be on or about 17 June 2016.

The purchase of the Notes will be financed with the funds received from the net proceeds of the issuance of U.S.$ 700 million 4.50 per cent. loan participation notes due 2023 (the "New Notes"). The settlement of the new issuance is expected to be completed on or about 15 June 2016.

The purpose of the Offers is to enable the Offeror to acquire, subject to the satisfaction of the Financing Condition, all the outstanding Notes that are validly tendered in the Offers. Together with the contemplated issuance of the New Notes, this would have the effect of extending the maturity profile of a portion of the NLMK's indebtedness.

If you need further information about the Offers, please contact the Joint Dealer Managers or the Information and Tender Agent.

Offer Website: http://sites.dfkingltd.com/nlmk

Contact Details:

THE OFFEROR

Steel Funding LimitedPinnacle 2

Eastpoint Business Park

Dublin 3Ireland

JOINT DEALER MANAGERS

Deutsche Bank AG, London BranchWinchester House

1 Great Winchester Street

London EC2N 2DB

United Kingdom

For information by telephone:

+44 20 7545 8011

Attention: Liability Management Group

Email: liability.management@db.com

ING Bank N.V., London Branch

60 London Wall

London EC2M 5TQ

United Kingdom

For information by telephone:

+44 20 7767 5107

Attention: Global Debt Syndicate

Email: liability.management@uk.ing.com

J.P. Morgan Securities plc25 Bank Street

Canary Wharf

London E14 5JP

United Kingdom

For information by telephone:

+44 20 7134 2468

Attention: Liability Management

Email: em_europe_lm@jpmorgan.com

Société Générale10 Bishops Square

London E1 6EG

United Kingdom

For information by telephone:

+44 20 7676 7579

Attention: Liability Management

Email: liability.management@sgcib.com

THE INFORMATION AND TENDER AGENT

D.F. King Ltd.Email: nlmk@dfkingltd.comWebsite: http://sites.dfkingltd.com/nlmk

In London:

125 Wood StreetLondon EC2V 7ANUnited KingdomTelephone: +44 20 7920 9700

In New York:

48 Wall Street, 22nd FloorNew York, New York 10005United StatesTelephone: +1 212 269 5550

Toll-Free (US only) (800) 820-2412

In Hong Kong:

Suite 1601, 16/F, Central Tower28 Queen's Road CentralHong KongTelephone: +852 3953 7230

NLMK

Media contact info:

Sergey Babichenko

+7 (495) 411-77-10

babichenko_sy@nlmk.com 

Investor Relations contact info:

Sergey Takhiev

+7 (495) 915 1575

tahiev_sa@nlmk.com

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK's metal products are used in various industries, from construction and engineering to the manufacturing of power-generating equipment and offshore wind turbines. NLMK's production assets are located in Russia, Europe, and the United States. NLMK Group was recognized as Steel Industry Leader at the prestigious 2016 Platts Global Metals Awards held by a leading international periodical S&P Global Platts, which provides analytical information on commodities and energy markets. The Company's steel production capacity exceeds 17 million tonnes per year, of which about 16 million tonnes are produced in Russia. NLMK has the most competitive cash cost among global manufacturers and one of the highest profitability levels in the industry. The company generated $8 billion in revenue, $1.95 billion in EBITDA and a net profit of $967 million in 2015. Net Debt/EBITDA ratio is 0.56. NLMK's ordinary shares are traded on the Moscow Stock Exchange (MICEX-RTS, ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI). The company's investment credit rating is BBB-.

For more information on NLMK Group www.nlmk.com/en

Neither this announcement, the Tender Offer Memorandum nor the electronic transmission thereof constitutes an offer to buy or the solicitation of an offer to sell Notes (and tenders of Notes for purchase pursuant to the Offers will not be accepted from Noteholders) in any circumstances in which such offer or solicitation is unlawful.