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.

13 July 2022

PAO "SEVERSTAL" ("SEVERSTAL")

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 Severstal (the "Programme")

U.S.$750,000,000 in aggregate principal amount of 5.90 per cent. Series 3 Loan Participation Notes due 2022 issued by the Issuer pursuant to the Programme on 15 October 2012 for the purpose of funding a U.S.$750,000,000 loan to Severstal (the "Loan")

of which U.S.$634,051,000 is currently outstanding

ISINs: XS0841671000; US85805RAB42 (the "Notes")

Severstal is soliciting consents of the holders of the Notes ("the  Noteholders") to the proposals set out herein (the "Proposals") to be approved by a written resolution of the Noteholders (the "Written Resolution") adopted pursuant to paragraph 9 (Written Resolution) of Schedule 5 (Provisions for Meetings of Noteholders) of the Trust Deed dated 19 October 2010 between the Issuer and the Trustee as supplemented by the Supplemental Trust Deed dated 17 October 2012 ("Trust Deed").

Terms defined in the Trust Deed or the Written Resolution 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 Severstal),  any payment of interest or principal under the Loan made by Severstal or received from the Issuer or Severstal by Citibank N.A., London branch (the "Principal Paying and Transfer Agent") will likely be blocked, delayed or frozen for an uncertain period of time and, consequently, those funds will not be distributed among the Noteholders. Though Severstal filed license applications with competent sanctions authorities in the relevant jurisdictions requesting authorizations required for processing of payments under the Loan and the Notes as per the ordinary course, no such authorizations 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 restricted certain payments from the Russian Federation to a number of jurisdictions, unless there is a governmental permission to a specific payment. If the governmental authorities reject to issue such permission to Severstal, it may not be able to repay interest or principal to the Issuer under the Loan and, consequently, the Issuer may not be able to repay the principal and interest accrued on 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, Severstal 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 Written 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 Written Resolution and should be read in conjunction with the Written Resolution which you can request as per the Section 3 below.

1. Amended Payment Mechanics

Since the aforementioned circumstances have resulted in a significant disruption of the Notes' payment infrastructure, Severstal invites the Noteholders to agree and authorise that the Issuer and/or Severstal can make any payment of interest or principal or can procure that such payment of interest or principal is made directly (or through relevant clearing systems or other financial intermediaries) to Noteholders as per below (the "Amended Payment Mechanics"):

1. Payments to the following Noteholders would be made in Roubles at the Central Bank of Russia foreign exchange rate (as of the payment date):

• the Noteholders holding Notes through Russian National Settlement Depository ("NSD") or other Russian custodians being the accountholders of Euroclear Bank SA/NV and Clearstream Banking, S.A. (the "Other Russian Custodians") as of 27 July 2022 (the "Record Date"), including those Noteholders which have arranged for their Notes to be transferred to an account with any Other Russian Custodian by the Record Date. Such Noteholders would receive payments through NSD or the relevant Other Russian Custodian, as applicable. The relevant payment obligations under the Notes would be discharged when the funds are received by NSD or Other Russian Custodians, as appropriate; and

• the Noteholders which, as of the Record Date, hold their Notes through foreign nominee holders and have elected, by application to Severstal delivered not later than 7 Russian business days prior to the payment date (which is fixed at 17 October 2022) (the "Payment Date"), unless otherwise set out in the Written Resolution, for payments to be made to a Rouble account opened in their name with a Russian credit institution, or, subject to all applicable laws, a foreign credit institution. Such Noteholders would receive payments from Severstal directly or through such financial intermediaries or other paying agents as may be engaged by Severstal at its sole discretion. The relevant payment obligations under the Notes would be discharged when the funds are debited from Severstal's Russian bank account;

2. Payments to the Noteholders not referred to in sub-paragraph (i) above would continue to be expressed to be made in accordance with the original terms of the Notes. These payments shall be made only after all relevant regulatory licenses from the authorities outside the Russian Federation, which, in case they are not granted to Severstal, shall be procured by the respective Noteholders, and all relevant approvals from the Russian authorities,

subject to additional conditions, procedures and requirements as set out in the Written Resolution.

Accordingly, the Noteholders, which hold their Notes outside of NSD or Other Russian Custodians, willing to receive payments in Roubles are encouraged either to transfer their Notes to an account with any Other Russian Custodian and/or open Rouble bank accounts with credit institutions.

2. Deferral of Interest Payment

As a result of the events beyond the Issuer's and Severstal's control, the interest under the Loan due on 17 April 2022 (the "April 2022 Interest") and the interest under the Notes due on 17 April 2022 (the "April 2022 Coupon") have not been paid and remain outstanding to date.

To ensure that the rights of the Noteholders are not prejudiced and that the arrangement expressed to allow the Noteholders to receive payments under the Notes (i.e., the Amended Payment Mechanics) is in place before the payment of the April 2022 Interest and the April 2022 Coupon is made, Severstal is seeking consent of the Noteholders to defer the April 2022 Interest and the April 2022 Coupon to the Payment Date with no default interest or similar payment accrued and/or being payable with respect to any amount of the April 2022 Interest and/or the April 2022 Coupon so deferred.

3. Early Redemption

In addition, Severstal invites the Noteholders to agree and authorise that Severstal and/or the Issuer shall on 29 August 2022 (the "Early Redemption Date") redeem the Loan and the Notes then outstanding at par together with accrued and unpaid interest thereon as at the Early Redemption Date (the "Early Redemption"). To the extent such Early Redemption is approved, any reference to the Payment Date shall be read as reference to the Early Redemption Date.

3. Execution requirements and effectiveness condition

In accordance with paragraph 9 (Written Resolution) of Schedule 5 (Provisions for Meetings of Noteholders) of the Trust Deed, the Written Resolution would become effective if signed by or on behalf of Noteholders representing in aggregate not less than two thirds in principal amount of the Notes outstanding at the time (the "Effectiveness Condition"). The Proposals set out in section 2(c) (Early Redemption) above will constitute a separate and independent part of the Written Resolution and will only become effective if the Proposals set out in sections 2(a) (Amended Payment Mechanics) and 2(b) (Deferral of Interest Payment) above become effective.

Severstal also reserve the right at any time to waive any or all of the conditions of the Written Resolution (including with respect to the proof of holding), other than the Effectiveness Condition, at its sole and absolute discretion.

To validly participate, a Noteholder who holds the Notes as of 20 July 2022, i.e. the date as of which the Noteholders eligible to consent to the Proposals are to be determined, should deliver, or arrange to have delivered on its behalf, a valid Written Resolution, duly completed and executed, to Legal Capital Investor Services ("Lecap") at by no later than 4:00 p.m. (London time) on 8 August 2022 (the "Approval Deadline"). In order to submit completed Written Resolutions, Noteholders are required to provide electronic copies of documents duly confirming the ownership of the Notes as of 20 July 2022, the examples of which are set out in the Written Resolution.

Copies of the Written Resolution will be available from Lecap and can be obtained upon request at . A person requesting a copy of the Written Resolution shall make a representation that it is a Noteholder or is acting in the interests of a Noteholder. Questions and requests for assistance in connection with the delivery of Written Resolution may be directed to Lecap at or at +7(495)1220517. Questions and requests for assistance in connection with the Written Resolution and the Proposals may also be directed to Severstal at (indicating “Written Resolution” as the subject) or +7(495)9610195 (ext. 21521).

Announcements in connection with the Written Resolution will be disclosed by Severstal on the website of the London Stock Exchange () and/or otherwise be made publicly available.

Severstal may, subject to applicable laws and the provisions of the Trust Deed, at their sole and absolute discretion, at any time extend the Approval Deadline, re-open the approval by way of the Written Resolution, amend the Proposals in any respect, delay the acceptance of Written Resolutions until satisfaction or waiver of the conditions to the Written Resolution (including, following the occurrence of the Approval Deadline), terminate the process of seeking the Written Resolution (including disregarding the Written Resolutions delivered before the time of such termination), which will be followed by a respective announcement from Severstal as soon as reasonably practicable after the relevant decision is made.

4. Disclaimers

The distribution of this notice and the Written Resolution to which it relates in certain jurisdictions may be restricted by law. Persons into whose possession this notice and the Written Resolution to which it relates come are required by Severstal, the Issuer, the Trustee, the Principal Paying and Transfer Agent and Lecap to inform themselves about, and to observe, any such restrictions.

This notice must be read in conjunction with the Written Resolution. This notice and the Written Resolution contain important information which should be read carefully before any decision is made with respect to the Written Resolution. If any Noteholder is in any doubt as to the action it should take or is unsure of the impact of the adoption of the Written Resolution, it is recommended to seek its own financial advice, including in respect of any tax consequences, immediately from its stockbroker, bank manager, solicitor, accountant or other independent financial or legal adviser. Any individual or company whose Notes are held on its behalf by a broker, dealer, bank, custodian, trust company or other nominee must contact such entity if it wishes to sign the Written Resolution.

None of Severstal, the Issuer, the Trustee, the Principal Paying and Transfer Agent and Lecap 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 Written Resolution, and accordingly none of Severstal, the Issuer, the Trustee, the Principal Paying and Transfer Agent and Lecap or their respective directors, officers, employees, affiliates, advisers or agents makes any recommendation as to whether Noteholders should sign the Written Resolution, or refrain from taking any action, and none of them has authorised any person to make such recommendation.

This notice is for informational purposes only. The Written Resolutions are sought only in such jurisdictions as is permitted under applicable law.