Mechel announces the placement of its first bond issue at par value with a coupon of 10.69%Moscow, Russia – November 25, 2004 – Mechel Steel Group OAO, a Russian metals and mining company, announces the placement of its first bond issue on MICEX. The coupon rate of the issue is 10.69%. According to the results of the first day of allocation, the total bond issue of Mechel was fully placed.
The bonds were placed at par. First coupon rate, indicated in applications, was in the range of 10.00 – 11.90% per annum. 26 deals were concluded during the auction. Bonds during the auction were placed in the amount of 1.63 billion Russian rubles.
Bonds, not placed during the auction to determine the first coupon, were placed during an additional trade session.
Mechel intends to use the proceeds from the placement of the bond to refinance existing debt and to finance capital expenditures.
The number of the bonds placed is 2 million. Par value of one bond is 1000 rubles, with a maturity of 3 years. Bondholders have the right to demand redemption of the bonds from Mechel in 1.5 years at its par value. The coupon is paid out semi-annually. The rate of the first coupon is determined during the fist day of the bond placement and is fixed until the first offer is made. The subsequent coupon rates will be determined and communicated to investors in the order and according to the period stated in the issue documents.
Mechel Trade House is a guarantor of Mechel’s bond issue. Alfa-Bank OAO was the underwriter and coordinator for the initial bond offering. Vneshtorgbank OAO, Petrocommerce OAO, MDM CB OAO and Rosbank OAO were co-coordinators of the placement and MMB ZAO, Promstroibank OAO, Russ-Invest OAO and Soyuz CB OAO were underwriters of the deal.
Mechel Steel Group OAO
Director of Communications
Mechel Steel Group is a Russian metals and mining company, uniting producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel Steel Group products are marketed domestically and internationally.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel Steel Group, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.