Mechel Announces Syndication of $2 Billion Acquisition Refinancing Package

Mechel announces that it has arranged a $2 bln Acquisition Refinancing Package through several banks.

The $2 billion Acquisition Refinancing Package will refinance the acquisition of the issued share capital of Yakutugol OJSHC (75% of the statutory issued share capital minus one share), Elgaugol (68.86% of the statutory issued share capital) and the real estate complex of a railway and a road from the Zeysk Railway Station (Far Eastern Railway) in Zeysk to the Elga coal deposits. As previously announced, the assets were acquired through an auction held on October 5, 2007.

The Acquisition Refinancing Package is comprised of a Classic Secured 5-year Pre-Export Finance Facility totaling $1.7 bln (85%) and 3-year Term Loan Facility totaling $300 mln (15%).

ABN AMRO, BNP Paribas, Calyon, Natixis, Sumitomo Mitsui Banking Corporation Europe Limited and Société Générale Corporate & Investment Banking are joint book running managers and are joined by Commerzbank Aktiengesellschaft to arrange the $2 billion Acquisition Refinancing Package for the Company.

Syndication was launched on November 2, 2007 and the banks were invited to participate in the transaction on a take and hold basis. A bank meeting took place in London on November 6, 2007 and was very well-attended.