PAO Severstal: NOTICE OF MEETING

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF HOLDERS. IF HOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD SEEK INDEPENDENT ADVICE, INCLUDING AS TO ANY LEGAL, FINANCIAL OR TAX CONSEQUENCES, IMMEDIATELY FROM THEIR OWN BROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL, TAX OR LEGAL ADVISER.

THIS NOTICE DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY AND IS BEING SENT TO HOLDERS SOLELY IN THEIR CAPACITY AS SUCH IN CONNECTION WITH THE MEETING (AS DEFINED BELOW). THIS DOES NOT AFFECT THE RIGHT OF HOLDERS TO APPOINT A PROXY TO ATTEND AND VOTE AT THE MEETING IN ACCORDANCE WITH THE PROVISIONS OF THE TRUST DEED AS DEFINED BELOW).

12October2022

PAO "SEVERSTAL"
(THE "COMPANY")

NOTICE OF MEETING
of the holders of the outstanding
U.S.$800,000,000 3.15 per cent. Series 6 Loan Participation Notes due 2024 (the "Notes") issued by, but with limited recourse to, Steel Capital S.A. (the "Issuer") for the sole purpose of financing a loan to PAO "Severstal" (the "Loan") under a U.S.$4,500,000,000 Programme for the Issuance of Loan Participation Notes (the "Programme") (Regulation S ISIN: XS2046736919, Common Code: 204673691
Rule 144А ISIN: US85805RAE80, CUSIP: 85805RAE8, Rule 144A Common Code: 204871531)

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") ofthe holders of Notes (the "Holders"), which is hereby being convened by the Company, will be held via video conference (with dial-in details to be provided by or on behalf of Legal Capital Investor Services (the "Information and Tabulation Agent") following its satisfaction of the identity of the Holders as to their status as Holders) on 3 November 2022 for the purpose of considering and, if thought fit, passing the Extraordinary Resolution (as defined in the Trust Deed) to approve the Proposals (as defined below).

The Meeting will commence at 2.00 p.m. (London time). Capitalised terms used but not defined in this Notice have the meanings given to them in the Conditions set out in the Amended and Restated Principal Trust Deed dated 15 March 2013, as supplemented by the Supplemental Trust Deed dated 16 September 2019, between the Issuer and Citibank, N.A., London Branch (the "Trustee") as trustee for the Holders of the Notes (the "Trust Deed").

Background

The Company has convened the Meeting for the purpose of enabling Holders to consider and resolve, if they think fit, to pass the Extraordinary Resolution relating to the Proposals (as defined below).

Holders are further given notice that the Company has invited Holders to approve the Proposals, including the modification and waiver of certain terms of the Facility Agreement, the Trust Deed, the Agency Agreement and the Notes (together, the "Proposals"), the details of which are set out in a consent solicitation memorandum prepared by the Company and dated the date hereof (the "Memorandum"), which can be obtained via email at svs24@lcpis.ru.

General

NEITHER THE ISSUER NOR THE TRUSTEE HAS BEEN INVOLVED IN THE FORMULATION OF THE EXTRAORDINARY RESOLUTION AND NEITHER OF THEM EXPRESSES ANY OPINION ON THE MERITS OF THE EXTRAORDINARY RESOLUTION OR ON WHETHER HOLDERS WOULD BE ACTING IN THEIR BEST INTERESTS IN APPROVING THE EXTRAORDINARY RESOLUTION, AND NOTHING IN THIS NOTICE SHOULD BE CONSTRUED AS A RECOMMENDATION TO HOLDERS FROM EITHER THE ISSUER OR THE TRUSTEE TO VOTE IN FAVOUR OF, OR AGAINST, THE EXTRAORDINARY RESOLUTION. HOLDERS SHOULD TAKE INDEPENDENT FINANCIAL, TAX AND LEGAL ADVICE ON THE MERITS AND ON THE CONSEQUENCES OF VOTING IN FAVOUR OF, OR AGAINST, THE EXTRAORDINARY RESOLUTION, INCLUDING AS TO ANY LEGAL, FINANCIAL OR TAX CONSEQUENCES, IMMEDIATELY FROM THEIR OWN BROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT, OR OTHER INDEPENDENT FINANCIAL, TAX OR LEGAL ADVISER. THE TRUSTEE AND THE ISSUER  HAVE NOT REVIEWED, NOR WILL BE REVIEWING, ANY DOCUMENTS RELATING TO THE PROPOSALS.

Holders may obtain a copy of the Memorandum from the Information and Tabulation Agent, the contact details for whom are set out below. A Holder will be required to represent to the Information and Tabulation Agent that it is an eligible holder of the Notes and that it is a person to whom it is lawful to send the Memorandum and to make an invitation pursuant to the Proposals under applicable laws before being sent a copy of the Memorandum.

Copies of this Notice, the Memorandum and the Trust Deed can be obtained via email at svs24@lcpis.ru.

The attention of Holders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of the Extraordinary Resolution at the Meeting or any meeting held following any adjournment of the Meeting, which are set out at "—Voting and Quorum" below. Having regard to such requirements, Holders are strongly urged either to attend the Meeting or to take steps to be represented at the Meeting as soon as possible.

Voting and Quorum

The provisions governing the convening and holding of a meeting of the Holders are set out in the Trust Deed, a copy of which is available for inspection by the Holders as referred to above.

The quorum required for the Extraordinary Resolution to be considered at the Meeting shall be one or more persons holding Notes or being proxies or representatives and holding or representing not less than two-thirds of the principal amount of the Notes for the time being outstanding.

If within half an hour from the time appointed for any such Meeting a quorum is not present, the Meeting shall be adjourned for such period, not being less than 14 days nor more than 42 days, as may be appointed by the chairman either at or after the Meeting, provided, however, only business which could have been transacted at the original Meeting may be transacted at a Meeting adjourned. Notice of any adjourned Meeting shall be given in the same manner as notice of the original Meeting, save that ten days' notice, shall be sufficient and such notice shall specifically set out the quorum requirements which will apply when the Meeting resumes.

At any adjourned Meeting, the quorum shall be one or more persons present in person holding Notes and/or being proxies or representatives and holding or representing in the aggregate not less than one-half in principal amount of the Notes for the time being outstanding.

To be passed in relation to the Notes, the Extraordinary Resolution must be passed at the Meeting duly convened and held in accordance with the provisions of Schedule 5 (Provisions for Meetings of Noteholders) of the Trust Deed by the affirmative vote of holders of Notes present in person or represented by proxy or representative owning in the aggregate not less than two-thirds in principal amount of the Notes owned by the Noteholders who are so present or represented at the Meeting or such adjourned Meeting.

Holders should note these quorum requirements and should be aware that, if the Holders either present or appropriately represented at the Meeting are insufficient to form a quorum for the Extraordinary Resolution, the Extraordinary Resolution (and consequently, the Proposals) cannot be formally considered thereat.

Pursuant to the provisions of Schedule 5 (Provisions for Meetings of Noteholders) of the Trust Deed, each question submitted to the Meeting shall be decided in the first instance by a show of hands.

If a poll is demanded, it shall be taken in such manner and either at once or after such adjournment as the chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which it was demanded as at the date it was taken.

On a show of hands every person who is present in person and is a Noteholder or is a proxy or representative shall have one vote. On a poll every person who is so present shall have one vote in respect of each U.S.$1,000 so held or owned or in respect of which he is a proxy or representative. Without prejudice to the obligations of proxies, any persons entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way.

If duly passed at a Meeting duly convened and held in accordance with the Trust Deed, the Extraordinary Resolution shall be binding on all the Noteholders, whether or not present at the meeting and each of them shall be bound to give effect to it accordingly. The passing of such resolution shall be conclusive evidence that the circumstances justify its being passed. The Issuer shall give notice of the passing of the Extraordinary Resolution to Noteholders within 14 days in accordance with Condition 14 (Notices) but failure to do so shall not invalidate the resolution. 

This notice and any non-contractual obligations arising out of, or in connection with, it shall be governed by, and shall be construed in accordance with, English law.

This Notice is given by the Company. Holders should contact the following for further information:

The Information and Tabulation Agent

Limited liability company "Legal Capital Investor Services"

Address: Krivokolenny lane, 10 bldg. 6, 101000, Moscow, Russia

Email:  svs24@lcpis.ru

Phone:   + 7 495 122 05 17

Website:  www.lcpis.ru

Addendum

Form of Extraordinary Resolution

Extraordinary Resolution

In accordance with paragraph 7 (Extraordinary Resolution) of Schedule 5 (Provisions for Meetings of Noteholders) of the Trust Deed and Condition 10.1 (Meetings of Noteholders), the Extraordinary Resolution (as defined in the Amended and Restated Principal Trust Deed dated 15 March 2013, as supplemented by the Supplemental Trust Deed dated 16 September 2019 (the "Trust Deed"))  shall be passed at a meeting duly convened and held in accordance with the Trust Deed by the affirmative vote of holders of Notes present in person or represented by proxy or representative owning in the aggregate not less than two-thirds in principal amount of the Notes owned by the Noteholders who are so present or represented at the Meeting or such adjourned Meeting. PAO "Severstal" (the "Company") hereby requests that the holders of U.S.$800,000,000 3.15 per cent. Series 6Loan Participation Notes due 2024 (the "Notes") issued by, but with limited recourse to, the Issuer for the sole purpose of financing a loan to the Company under a U.S.$4,500,000,000 Programme for the Issuance of Loan Participation Notes (the "Programme") (the "Noteholders") by Extraordinary Resolution resolve:

1. to approve and consent to the Proposals as set out in "Summary of the Proposals" in the Consent Solicitation Memorandum dated 12 October 2022 (the "Memorandum") and agree that the Proposals (including, but not limited to, the Amended Payment Mechanics) shall become binding on the Noteholders, the Issuer, the Company, the Principal Paying Agent, the Registrar and the Trustee regardless of whether or not the Amendment Documents documenting the Proposals are executed, and waive any actual or potential breaches that might formally occur as a result of the Issuer, the Company, the Principal Paying Agent, the Registrar and/or the Trustee acting in accordance with the Proposals to the extent such Proposals are not formalised by way of executing the Amendment Documents;
2. to acknowledge and agree that (i) the provisions of the Amended Payment Mechanics override any provisions of the Trust Deed, the Amended and Restated Paying Agency Agreement dated 15 March 2013 and any other agreement and document entered into between the Issuer, the Company, the Trustee and/or the Principal Paying Agent in relation to the Notes (the "Transaction Documents") regarding the appropriation and distribution of such amounts; (ii) the provisions of the Amended Payment Mechanics shall continue in full force and effect regardless of whether or not the Amendment Documents implementing the provisions of the Amended Payment Mechanics are executed; (iii) the provisions of the Amended Payment Mechanics, or any payments made in accordance therewith or actions taken in reliance thereon, shall in no event constitute and/or be treated as a Relevant Event, Event of Default or Potential Event of Default; and (vi) the making of any payments in accordance with the Amended Payment Mechanics is subject to all applicable laws of the Russian Federation and the procurement of the necessary approvals, authorisations, consent and licences from the Competent Russian Authorities and Competent Foreign Authorities as may be required on the relevant payment date;
3. to agree, authorise and direct the Trustee, the Principal Paying Agent, the Registrar, the nominee of and the common depositary for Euroclear and Clearstream, Luxembourg and the nominee of and custodian for DTC, as well as the Clearing Systems to take into account any information submitted to the Trustee and the Principal Paying Agent (as the case may be) by the Issuer or the Company (or any person authorised by or on behalf of the Issuer or the Company) in relation to payments of interest or principal by Issuer or the Company under the Amended Payment Mechanics;
4. without limitation to the generality of paragraph 2 of this Extraordinary Resolution, to agree, authorise and direct the Trustee, the Principal Paying Agent, the Registrar, the nominee of and the common depositary for Euroclear and Clearstream, Luxembourg and the nominee of and custodian for DTC, as well as the Clearing Systems to agree and comply with, an instruction from the Issuer and/or the Company to the Principal Paying Agent to distribute any funds received by the Principal Paying Agent among certain Noteholders only, in view of the distribution of funds made or to be made by the Issuer or the Company under the Amended Payment Mechanics, accompanied by a certificate signed by an authorised signatory of the Issuer or the Company (as the case may be) with a list of the Noteholders or their respective accounts with Euroclear or Clearstream, Luxembourg indicating to which Noteholders the payment was made by the Issuer or the Company under the Direct Payment Option and the respective amounts paid;
5. to agree, authorise and direct the Trustee to agree that making a payment of any sum then due in relation to the Notes by the Issuer or the Company where (i) such payment is partially made to the Principal Paying Agent and (ii) the balance payment is made to certain Noteholders in relation to some or all of the Notes owned by such Noteholders (in each case, as may be determined by the Company on a case-by-case basis in its absolute discretion) in accordance with the Direct Payment Option, shall constitute a due, timely and punctual performance of the Issuer’s and/or the Company’s payment obligations (as the case may be) in respect of such amount and, consequently, the unconditional and irrevocable discharge to the Issuer and/or the Company (as the case may be) in respect of such amount under Facility Agreement and the Notes;
6. to agree that the payment being made in accordance with the Direct Payment Option shall constitute a good discharge of the equivalent payment obligation of the Company under the Loan, which shall then be deemed automatically extinguished for all purposes;
7. to authorise, direct, ratify, sanction, request, instruct and empower the Trustee to concur in and, without the need for any further consent or approval, to take steps as may be necessary or desirable in the Trustee’s sole discretion to carry out and give effect to the Proposals approved by this Extraordinary Resolution and to refrain from taking any steps which may conflict with, or be prejudicial to, the Proposals;
8. to discharge and exonerate the Company, the Issuer, the Trustee, the Principal Paying Agent (as the case may be) from all liability for which it may have become or may become responsible under the Transaction Documents, or the Notes in respect of any act or omission in connection with this Extraordinary Resolution or its implementation;
9. to acknowledge and agree that nothing contained herein shall impair the rights of the Trustee to seek reimbursement of or indemnification against all losses, liabilities, damages, costs, charges and expenses incurred by the Trustee which are available to the Trustee under the terms of the Trust Deed;
10. to assent, approve and acknowledge that the Issuer and the Trustee are hereby authorised and instructed not to obtain any legal opinions in connection with this Extraordinary Resolution, and that they shall not be liable to any Noteholder for the failure to do so or for any consequences from following this instruction;
11. to irrevocably waive any claim that the Noteholders may have against the Company, the Issuer, the Trustee, the Principal Paying Agent (as the case may be) arising as a result of any loss or damage which it may suffer or incur as a result of the Company, the Issuer, the Trustee, the Principal Paying Agent (as the case may be) acting upon this Extraordinary Resolution (including but not limited to circumstances where it is subsequently found that there is a defect in the passing of this resolution or that this resolution is not valid or binding on the Noteholders) and confirm that the Noteholders will not seek to hold the Company, the Issuer, the Trustee, the Principal Paying Agent (as the case may be) liable for any such loss or damage;
12. to the extent payments are duly made in accordance with the Direct Payment Option, to irrevocably and unconditionally waive and renounce any and all rights to receive or claim the respective amounts in accordance with the original Conditions and undertake to provide such written confirmations or other evidence to the same effect, including that the respective payment obligations under the Notes have been properly discharged in full, as may be requested by the Company, the Issuer, the Principal Paying Agent, the Registrar, the Clearing Systems, the nominee of and the common depositary for Euroclear and Clearstream, Luxembourg and the nominee of and custodian for DTC;
13. waive any actual or potential breaches of the Facility Agreement, the Trust Deed, the Agency Agreement and Conditions and any deficiencies that might formally occur as a result of this Extraordinary Resolution being adopted on the basis of the procedures set out in the Memorandum (including the procedures for convening the meeting of the Noteholders, holding thereof and voting thereat) and ratify any and all such breaches and/or deficiencies and instruct the Trustee to waive the same and treat this Extraordinary Resolution as a valid one despite any such breaches or deficiencies having occurred;
14. agree that this Extraordinary Resolution shall amend and restate the respective terms of the Programme and the Transaction Documents and all Noteholders shall be bound to give effect thereto regardless of whether or not the Amendment Documents documenting the Proposals are executed; and
15. resolve that terms used but not defined in this Extraordinary Resolution shall have the meanings ascribed to them in the Memorandum

A copy of the Trust Deed (including the Conditions) referred to herein will be available for inspection upon request from the Information and Tabulation Agent.

The Company hereby requests the Noteholders to acknowledge, confirm and agree that:

1. each of the Noteholders shall promptly, and in any event within 30 Russian business days from the relevant request from the Company, or another company which may be engaged by the Company, or financial intermediary or other paying agent as may also be engaged by the Company at its sole discretion and the identity of which to be communicated to the Noteholders (the "Payors" and any of them – the "Payor") furnish to the respective Payor all documents relating to the acquisition and ownership of the Notes which the respective Noteholder holds and such other documents and information, including in relation to the withholding tax and KYC, as may be reasonably requested by such Payor;
2. the terms of this Extraordinary Resolution have not been formulated by the Trustee or the Issuer who express no view on them, and nothing in this Extraordinary Resolution or otherwise should be construed as a recommendation to the Noteholders from the Trustee or the Issuer to either approve or reject this Extraordinary Resolution;
3. the Trustee and the Issuer have not been involved in the formulation of this Extraordinary Resolution and, in accordance with normal practice, it expresses no opinion on the merits (or otherwise) of this Extraordinary Resolution (which it was not involved in negotiating);
4. the Trustee and the Issuer are not responsible for the accuracy, completeness, validity or correctness of the statements made and documents referred to in this Extraordinary Resolution or any omissions from this Extraordinary Resolution; 
5. the Noteholders have consulted their own independent legal and/or financial advisers and conducted such due diligence as they consider necessary or appropriate for the purposes of considering this Extraordinary Resolution;
6. the Noteholders have formed their own view in relation to the actions arising out of this Extraordinary Resolution without any reliance on the Trustee, the Issuer, the Company or their advisers;
7. the Trustee or the Issuer have not given (directly or indirectly through any other person) any assurance, guarantee, or representation whatsoever as to the expected or projected success, profitability, return, performance, result, effect, consequence or benefit (including legal, regulatory, tax, financial, accounting or otherwise) of this Extraordinary Resolution; and
8. the Noteholders are sophisticated investors familiar with transactions similar to their investment in the Notes and persons submitting Voting Instructions are acting for their own account or on account of Noteholders eligible to submit such Voting Instructions, and have made their own independent decisions in respect of the passing of this Extraordinary Resolution and have delivered the resolution with full understanding of all the terms, conditions and risks associated with or that exist or may exist now or in the future in connection with this Extraordinary Resolution and they confirm that they are capable of assuming and are willing to assume (financially or otherwise) those risks. 

Terms not otherwise defined in this Extraordinary Resolution shall have the meaning ascribed thereto in the Consent Solicitation Memorandum dated 12 October 2022.

This Extraordinary Resolution and any non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, English law.