NOT FOR DISTRIBUTION IN OR INTO OR TO ANY PERSON LOCATED OR RESIDENT IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS DOCUMENT.

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 IMMEDIATELY CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS.

THIS NOTICE CONTAINS IMPORTANT INFORMATION THAT IS OF INTEREST TO THE REGISTERED AND BENEFICIAL OWNERS OF THE NOTES. IF APPLICABLE, ALL DEPOSITORIES, CUSTODIANS AND OTHER INTERMEDIARIES RECEIVING THIS NOTICE ARE REQUIRED TO EXPEDITE TRANSMISSION HEREOF TO BENEFICIAL OWNERS OF THE NOTES IN A TIMELY MANNER. IF HOLDERS OR BENEFICIAL OWNERS OF THE NOTES ARE IN ANY DOUBT AS TO THE MATTERS REFERRED TO IN THIS NOTICE, THEY SHOULD CONSULT THEIR STOCKBROKER, LAWYER, ACCOUNTANT OR OTHER PROFESSIONAL ADVISER WITHOUT DELAY.

If you have recently sold or otherwise transferred your entire holding(s) of Notes referred to below, you should immediately forward this notice to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

12 October 2022

PAO "SEVERSTAL" (THE "COMPANY")

IMPORTANT NOTICE TO NOTEHOLDERS

Programme for the Issuance of Loan Participation Notes issued by Steel Capital S.A. (the "Issuer") for the purpose of funding loans to the Company (the "Programme")

U.S.$800,000,000 in aggregate principal amount of 3.15 per cent. Series 6 Loan Participation Notes due 2024 issued by the Issuer pursuant to the Programme on 16 September 2019 for the purpose of funding a U.S.$800,000,000 loan to the Company (the "Loan")

of which U.S.$800,000,000 is currently outstanding

ISINs: XS2046736919; US85805RAE80 (the "Notes")

The Company is soliciting consents of the Noteholders to the proposals set out herein (the "Proposals") to be approved by an extraordinary resolution of the Noteholders (the "Extraordinary Resolution") adopted pursuant to paragraph 7 (Extraordinary Resolution) of Schedule 5 (Provisions for Meeting of Noteholders) of the Amended and Restated Principal Trust Deed dated 15 March 2013 between the Issuer and the Trustee, as supplemented by the Supplemental Trust Deed dated 16 September 2019 ("Trust Deed") and Condition 10.1 (Meeting of Noteholders).

Terms defined in the Trust Deed or the Consent Solicitation Memorandum dated 12 October 2022 (the "Consent Solicitation Memorandum") shall have the same meaning herein unless the context requires otherwise.

1. Background

As a result of extensive sanctions and other restrictive measures, including the full blocking sanctions, that have been recently introduced by the U.S., the EU and the UK against Russia and/or various Russian individuals and entities (such as the Company),  any payment of interest or principal under the Loan made by the Company or received from the Issuer or the Company by Citibank N.A., London branch (the "Principal Paying Agent") will likely be blocked, delayed or frozen for an uncertain period of time and, consequently, those funds will not be distributed among the holders of the Notes (the "Noteholders"). Though the Company filed license applications with competent sanctions authorities in the relevant jurisdictions requesting authorisations required for processing of payments under the Loan and the Notes as per the ordinary course, no such authorisations have been received to date and no assurance can be given as to when (if at all) they will be granted.

In addition, in response to the international sanctions, the Russian authorities effectively introduced a permit-based system with regard to payments from the Russian Federation to payees in certain jurisdictions. Accordingly, absent the necessary approval from the Competent Russian Authorities, the Company may not be able to repay interest or principal to the Issuer under the Loan and, consequently, the Issuer would not be able to make an onward payment under the Notes in accordance with the original terms of the Notes.

In light of the above, in order to ensure the Noteholders' rights are not prejudiced and with a view to facilitate payments in relation to the Notes, the Company is seeking the Noteholders' consent to certain modifications to the terms of the Notes, as set out in more detail below.

2. Proposals sought by way of the Extraordinary Resolution

This notice is a summary of some of the Proposals only and does not contain a full description of all Proposals included into the Consent Solicitation Memorandum and should be read in conjunction with the Consent Solicitation Memorandum which you can request as per the Section 3 below.

1. Amended Payment Mechanics

If the Extraordinary Resolution is duly passed, the Issuer and/or the Company shall make any payment of principal, interest or other amounts under the Notes or procure that such payment of principal, interest or other amounts is made in the following manner (including, through a combination of options set out below, provided that each such option can be used in relation to some or all of the Notes or some or all of the Noteholders, in each case as determined at the sole and absolute discretion of the Issuer and/or the Company):

Direct Payment Option

Under the direct payment option (the "Direct Payment Option"), the payments to:

1. the Noteholders holding Notes through Russian National Settlement Depository ("NSD") or other Russian custodians being direct or indirect accountholders of the Clearing Systems (the "Other Russian Custodians") as of the relevant record date for payment (including those Noteholders which have arranged for their Notes to be transferred to an account with any Other Russian Custodian by the relevant record date for payment); and

2. the Noteholders which, as of the relevant record date for payment, hold their Notes through foreign nominee holders and have elected, by application to the Company delivered not later than 30 calendar days from the relevant record date for payment (the "Documents Cut-Off Date"), for payments to be made to a Rouble account in their name with a Russian credit institution or, subject to all applicable laws, foreign credit institution (the "Personal Rouble Account") or another Rouble account opened in the name or to the benefit of some or all of the Noteholders or beneficial owners of the Notes (the "Another Rouble Account"),

would be made in Roubles at the Central Bank of Russia foreign exchange rate (as of the date the Company pays the relevant amounts) through NSD or the relevant Other Russian Custodian, as applicable (in the context of paragraph (i) above) or by the Company directly or by such financial intermediary or other paying agent as may be engaged by the Company at its sole discretion (in the context of paragraph (ii) above), provided that payments in accordance with paragraph (ii) shall be made to a Noteholder not later than 45 calendar days from the relevant record date for payment (assuming that the relevant Noteholder delivers to the Company the Proof of Holding in Agreed Form as of the relevant record date for payment, the details of the Personal Rouble Account (where the payment is to be made to a Personal Rouble Account), the identification documents and other documents as may be reasonably requested by the Company (the "Payment CPs") by the Documents Cut-Off Date and subject to additional conditions, procedures and requirements as set out in the Consent Solicitation Memorandum, failing which the amounts payable to such Noteholder will be payable in accordance with the original Conditions.

Payments in accordance with the original Conditions

Payments to the Noteholders who are not eligible for, or have failed to properly apply for (including to duly deliver the Payment CPs or other supporting documents), payments in accordance with the Direct Payment Option, would continue to be expressed to be made in accordance with the original Conditions. Such payments shall be made or procured by the Company subject to and only after all relevant regulatory licenses from the Competent Foreign Authorities and Competent Russian Authorities that may be required for such payments to be made in accordance with the original Conditions are obtained. In these circumstances, such payments are to be made within 10 Business Days from the date that the Company determines at its sole discretion and to its satisfaction that all relevant regulatory licenses and approvals from the Competent Foreign Authorities and Competent Russian Authorities are procured.

2. Deferral of the Date of the Payment of the March 2022 Coupon and the September 2022 Coupon

If the Extraordinary Resolution is duly passed, the interest due on 16 March 2022 and 16 September 2022 shall be paid in accordance with the Amended Payment Mechanics on Business Day immediately following the date of the Extraordinary Resolution being passed (the "2022 Coupon Payment Date"), with the relevant record date being one Clearing System Business Day (as defined in the relevant Global Certificate) before the 2022 Coupon Payment Date.

3. Extension of Grace Period

If the Extraordinary Resolution is duly passed, the grace period for the payment of principal, interest and other amounts under the Loan and the Notes shall be increased from five Business Days to forty five calendar days.

4. Modifications with respect to the Delivery of Financial Information by the Company

If the Extraordinary Resolution is duly passed, with respect to the Loan only, the undertaking of the Company to deliver the annual and semi-annual consolidated financial statements to the Issuer (as lender) set out in the Amended and Restated Facility Agreement between the Issuer and the Company dated 3 September 2019 as supplemented by the Loan Supplement between the Issuer and the Company dated 12 September 2019 (the "Facility Agreement") shall apply only to the extent, and insofar as, the Company is required to publish such financial statements as a matter of Russian law.

5. Simplified Cancellation of the Notes

If the Extraordinary Resolution is duly passed, to enable cancellation of the Notes held by the Issuer, the Company is proposing that the Notes purchased or otherwise held by the Issuer, the Company, its subsidiaries or affiliates may be designated by the Issuer, the Company, its subsidiaries or affiliates as Notes deemed cancelled (the "Designated Notes"), and that no interest shall accrue on, and no principal amount shall be payable in respect of, the Designated Notes, from (and including) the date when the Issuer, the Company, the relevant subsidiary or affiliate sends notice to the Principal Paying Agent and the Registrar that the Designated Notes have been submitted or surrendered for cancellation (regardless of whether or not such Designated Notes are in fact cancelled) (the "Designation Date"). Accordingly, any Designated Notes shall not be deemed to be outstanding for purposes of the Trust Deed and the Issuer will not be liable to pay any amounts on any Designated Notes from (and including) any Designation Date and the corresponding amount of the Loan and any interest payable thereon shall automatically be extinguished from the Designation Date and the Company shall have no liability in respect of such amount extinguished.

6. Modification of the Provisions on the Passing of the Written Resolutions

If the Extraordinary Resolution is duly passed, the threshold for the passing of a Written Resolution shall be reduced from two-thirds in principal amount of the Notes outstanding at the time to clear majority in principal amount of the Notes outstanding at the time.

3. Terms of the Consent Solicitation and Participation Requirements

In accordance with paragraph 7 (Extraordinary Resolution) of Schedule 5 (Provisions for Meeting of Noteholders) of the Trust Deed and Condition 10.1 (Meeting of Noteholders), the Extraordinary Resolution 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. If any Meeting is adjourned through want of quorum, the quorum required at such adjourned Meeting 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.

The Company reserves the right, in their sole and absolute discretion, to waive any defects, irregularities or delays in connection with deliveries of Voting Instructions.

To validly participate in the Consent Solicitation and consent to the Proposals, a Noteholder should deliver, or arrange to have delivered on its behalf, a valid Voting Instruction voting in favour of, or against, the Proposals to the Information and Tabulation Agent by no later than 1 November 2022 (2.00 p.m. (London time)) (the "Voting Deadline"). Only Noteholders who hold the Notes as of the Record Date may submit a Voting Instruction. Voting Instructions can only be submitted in relation to the Notes in principal amounts of U.S.$200,000 or integral multiples of U.S.$1,000 in excess thereof. The Voting Instructions submitted by the Noteholders shall remain in full force in case of the Meeting's adjournment and be taken into account at determining the voting results at an adjourned Meeting.

Electronic copies of the Consent Solicitation Memorandum can be obtained via application to the Information and Tabulation Agent at  . A person requesting a copy of the Consent Solicitation Memorandum shall make a representation that it is a Noteholder or is acting in the interests of a Noteholder. Questions and requests on the procedural matters of the Consent Solicitation, including the delivery of a Voting Instruction, should be directed to the Information and Tabulation Agent via email at and questions and requests related to the nature of the Proposals should be directed to the Company via email at .

Unless stated otherwise, announcements in connection with the Consent Solicitation will be made by publication through Euronext Dublin and/or Regulatory News Service and/or the Company's website. Copies of all announcements, notices and press releases can be obtained from the Information and Tabulation Agent by email at . 

The Company may, subject to applicable laws and the provisions of the Trust Deed, at its option and in its sole and absolute discretion, at any time:

1. extend the Voting Deadline or re-open the Consent Solicitation (in which case all references in the Consent Solicitation Memorandum to "Voting Deadline" shall be to the latest time and date to which the Voting Deadline has been so extended or the Consent Solicitation re-opened);

2. otherwise extend, re-open and/or amend the Consent Solicitation in any respect (including, but not limited to, any increase, decrease, extension, re-opening and/or amendment, in relation to the Voting Deadline and/or the Meetings); or

3. terminate the Consent Solicitation, including with respect to the Voting Instructions delivered before the
   time of such termination.

The Company will make an announcement in respect of any such extension, re-opening, amendment and/or termination as soon as reasonably practicable after the relevant decision is made.

4. Disclaimers

The distribution of this notice and the Consent Solicitation Memorandum to which it relates in certain jurisdictions may be restricted by law. Persons into whose possession this notice and the Consent Solicitation Memorandum to which it relates come are required by the Issuer, the Company, the Trustee and the Information and Tabulation Agent to inform themselves about, and to observe, any such restrictions.

None of the Issuer, the Company, the Trustee and the Information and Tabulation Agent or any director, officer, employee, agent or affiliate of any such person, is acting for any Noteholder, or will be responsible to any Noteholder for providing any protections which would be afforded to its clients or for providing advice in relation to the Proposals and/or the Consent Solicitation Memorandum, and accordingly none of the Issuer, the Company, the Trustee and the Information and Tabulation Agent or their respective directors, officers, employees, affiliates, advisers or agents makes any recommendation as to whether Noteholders should deliver the Voting Instruction with respect to the Extraordinary Resolution, or refrain from taking any action, and none of them has authorised any person to make such recommendation. For the avoidance of doubt, the Trustee and the Issuer have not reviewed or approved, nor will they be reviewing or approving, any documents relating to the Proposals. 

This notice is for informational purposes only. The Extraordinary Resolution is sought only in such jurisdictions as is permitted under applicable law.