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Severstal Resources Extends Offer for Shares of PBS Coals Limited

10/13/2008 - OAO Severstal affiliate 7027940 Canada Limited extends the expiration date for its offer to purchase all outstanding shares of PBS Coals Limited at an offer price of C$8.30 cash per share.

OAO Severstal affiliate 7027940 Canada Limited (the Offeror) has extended the expiration date for its offer to purchase all outstanding shares of PBS Coals Limited at an offer price of C$8.30 cash per share.
 
The company said the offer had been extended to October 20, 2008 in order to allow for receipt of confirmation from the Committee on Foreign Investment in the United States under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended, that no second-stage investigation will be initiated in respect of the joint application submitted by Severstal and PBS Coals Corp.
 
Shares representing approximately 94% of the outstanding shares of PBS Coals Limited have been tendered and not withdrawn pursuant to the offer.
 
The company said the Offeror will soon file its Notice of Extension with Canadian regulatory authorities and mail copies to all shareholders of PBS Coals Limited. Severstal Resources has retained RBC Capital Markets as financial advisor and Torys LLP in New York and Toronto as legal counsel.
 
PBS Coals Limited was formerly known as Penfold Capital Acquisition Corp.
 
Severstal Resources is a leading feedstock supplier in Russia to the iron-and-steel industry which manages the mining assets of Severstal. Severstal Resources incorporates the Karelsky Okatysh and Olcon iron ore complexes and Vorkutaugol, a coal mining complex. Stalmag, a niobium production facility is also part of Severstal Resources. In 2007, these operations produced 7.6 million tonnes of coking-coal, 1.8 million tonnes of steam coal, 10 million tonnes of iron-ore pellets and 4.7 million tonnes of iron-ore concentrate.
 
In 2007, Severstal Resources established a gold business segment, which totaled 5.3 tonnes of gold output over the past year. In May, 2008 Severstal Resources reached an agreement to purchase up to a 61.5% stake in African Iron Ore Group Ltd, which owns the exploration rights for an iron ore deposit in the Putu Range area of Liberia, West Africa.
 
OAO Severstal, an international steel producer, focuses on high value added and unique niche products and has a successful track record of acquiring and integrating high-quality assets in North America and Europe. Severstal owns mining assets in Russia, thus securing its supplies of raw materials. In 2007, Severstal produced 17.5 million tonnes of steel with revenues of US$15.2 billion, EBITDA of US$3.7 billion and earnings per share of US$1.92.