$350m Eurobond Request for covenant reset. February 2013

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1 $350m Eurobond Request for covenant reset February 2013

Operational Performance Annual production rates 2010 2012 Mln t *Coke 6% moisture including metallurgical coke, foundry coke, coke nut, coke breeze, coke dust Source: Management accounts Comments

2 Operational Performance Annual production rates Mln t *Coke 6% moisture including metallurgical coke, foundry coke, coke nut, coke breeze, coke dust Source: Management accounts Comments Production of iron ore concentrate, coke and pig iron remained at approximately the same level with high utilization rate of production capacities Slight changes in production volumes within the past several years were attributed to a number of technical reasons, including regular maintenance scheduled at different facilities Increase of coking coal concentrate output in 2011 was achieved as a result of additional volumes of coal processed for third parties, increasing the washing plant utilization rate and earning additional profit Decrease in coking coal production in was attributed to certain geological issues at Vladimirskaya and Romanovskaya mines, which were resolved in the course of 2012 Further modernisation and technical upgrades resulted in the increased coal production at Uchastok Koksovy open pit in

3 Structure of pig iron and coke sales KOKS Group s export sales of pig iron 1.99mt 1.78mt 1.95mt 1.97mt* 100% 7% 8% 90% 17% 14% 9% 80% 40% 10% 70% 35% 60% 35% 8% 31% 50% 12% 8% 40% 6% 5% 6% 6% 5% 7% 30% 20% 40% 30% 29% 32% 10% 0% USA Italy Spain Rest of Europe Turkey and Middle East Asia Source: Company s and traders data 2012 volumes of trade pig iron by Russian producers 10% 2012 coke exports by Russian producers 5% 0% 12% 8% 11% 23% 2% 3% 2% 17% 28% 44% 37% Tulachermet Ural Steel Novolipetsk MK Kosogorsk МZ Other Svobodny Sokol MZ Serova Серова Chelyabinsk МК KOKS (Kemerovo) Altay-Koks Severstal Moscow KGZ Magnitogorsk MK Other 2012 Total: 4.8 mln t 2012 Total: 2.5 mln t * Include Dec 2012 forecast data Source: Metal Courier 3

4 Key financials E (preliminary guidance) Key financials* 60 RUR bln Drastic change in the global market cycle of the mining industry has negatively impacted KOKS financial results in 2012 and could also do so in 1H 2013 During 2012 there was a generally negative price trend on pig iron market with the exception of September and December spikes, supported by the rise of global industrial activity. Price growth recorded in December continued through January 2013 Reduction in 2012 revenues is also attributed to the transfer of a part of export volumes to third party trading companies, who were buying our products on FCA basis, compared to sales via IMT, where prices also included transportation costs on FOB, CIF etc. terms. The Group s 2011 revenues included RUR 24.7 bln received via consolidated IMT, while in 2012 these amounted to RUR 4.6 bln only Improved operating performance of pig iron and coal concentrate production along with strictest cost optimising measures started in the beginning of 2H 2012 have brought good results to partially offset the negative market trends and establish a solid platform for further focused development in 2013 Debt levels have not risen drastically (to RUR bln at the end of 2012 from RUR 25.6 bln at the end of 2011) in spite of a large capex program dedicated mostly to the coal mining business segment In 2012, capex volumes were reduced from initially budgeted RUR 9 bn by around 20% due to efficient capex management and decrease of market prices on equipment and subcontracting Revenue EBITDA Capex Total Debt ** E * IFRS consolidated financial statements for and estimation for 2012E based on management accounts ** The reason for revenue reduction in 2009 was not only the financial crisis, but also a necessity to shut down BF No.1 at Tulachermet due to technological regulation KOKS Group maintains a strict financial discipline targeted at the continuous monitoring and improvement of the Group's credit profile by preserving a conservative capital structure, consistent with the overall risk profile of the Group, and focusing on keeping a solid financial performance 4

18% Other indebtness Sberbank Unicredit Bank of Moscow Gazprombank 35% 40% 25% Secured debt Unsecured Eurobond USD

5 Debt overview 2012E (preliminary guidance) Current Debt Maturity Profile US$m Total debt: $899m Debt by Currency Debt by Creditor Debt by Security Type 0.87% 7.02% 10.22% Eurobonds RUR bonds 44% 56% 28.36% 18.33% 35.18% Other indebtness Sberbank Unicredit Bank of Moscow Gazprombank 35% 40% 25% Secured debt Unsecured Eurobond USD RUR 0.02% Source: Management accounts Committed undrawn credit facilities amounted to RUR 51.2 billion ($1.7 bln) as of 31 December

6 Butovskaya, Tikhova and Vladimirskaya Mines: Production & Capex Schedule Butovskaya Mine Vladimirskaya Mine Tikhova Mine 3,500 3,000 2,500 2,000 1,500 1, ,000-1,500 Mln RUR 2,852 1, Mln RUR Vladimirskaya 2 development 1,966 1,090-1, Lutuginsky Seam development 1,800-2, Extraction starts at 2,000 1,700 1,400-1,600 Lutuginsky Seam , , , ,300 1,000 1, tonnes Development Capex Extraction tonnes Development Capex Extraction -2, tonnes Development Capex Extraction In 1H 2013, KOKS Group is expected to start production at its Butovskaya mine (1.5 mln tonnes full capacity) and in 2H 2014 at its Tikhova mine (3 mln tonnes full capacity of high value hard coking coal grade Zh) Overall capex plans for 2013 have been reduced by approximately 20-40% from initially planned RUR 9 bn due to optimisation of contracted cost, as well as focussing on the projects of highest priority The launch of the Butovskaya and Tikhova mines will have multiple synergetic effects on the operational and financial performance of the Group due to an optimal combination of available coal grades and the high operating efficiency of these assets The launch of Lutuginskiy seam at Vladimirskaya mine will bring additional 150 thousand tonnes of coal by the end of 2013 The completion of the Butovskaya and Tikhova mines and the expansion of the Vladimirskaya mine are the highest strategic priority for KOKS Group in that should bring additional financial stability and value to the Company ,000 3,000 Mln RUR 3,350 3,650 3,150 3,450 6

7 Transformation, modernisation and growth strategy Coal projects to transform KOKS Group into one of the leading coal producers in Russia KOKS Group Coal Production Expansion of Mining Capacity and Coal Resources Mln t 3.8 Project Coal Grade Reserves Resources New Capacity Start of Production Capex* 2012 Capex* Capex* Butovskaya KO, KSN, KS 23 mt 111 mt 1.5 mtpa by RUR 3.6bn RUR 2.9bn RUR 2.4bn RUR 4.2bn Tikhova Zh 65 mt 195 mt 3.0 mtpa 2014 RUR 1.9bn RUR 1.7bn RUR 9.7bn RUR 10.7bn 1.0 Lutuginsky Seam KO, KS 1.2 mt 2 mt 0.4 mtpa 2013 RUR 0.0bn RUR 0.0bn RUR 0.1bn RUR 0.2bn E 2016E Vladimirskaya-2 TO, KSN, KO 12 mt 47 mt 0.9 mtpa 2015 RUR 0.0bn RUR 0.0bn RUR 0.6bn RUR 1.4bn Source: Management accounts * Development capex Coal projects planned by the Group are aimed to achieve full self sufficiency in high quality coking coal, in particular that of pure Zh grade from the Tikhova mine, which will ensure secured, uninterrupted supplies of high quality raw material and production of higher quality coke required for obtaining a higher yield in the pig iron making process 7

8 Necessity to finalise Capex programme Metals and mining companies with a higher level of vertical integration show a higher EBITDA by tonne of final product In view of the higher profitability of the raw materials side of the business, the highest priority for KOKS is to ensure a higher level of vertical integration Profitability of the coking coal and iron ore segments has been increasing over the past 15 years Multiple positive synergetic effects of the new mining assets on the operational and financial performance, including: better quality of coke, increased productivity of blast furnaces, scarcity and higher value of Zh grade coal (close to hard coking coal) to be extracted by Tikhova mine and lower cash costs due to higher scale of production Captive high quality Zh grade coal will substitute lower quality GZh grade bought from third parties to improve coke quality and increase pig iron production efficiency The completion of the highly efficient Butovskaya and Tikhova coal mines in 2013 and 2014, respectively, and expansion of the Vladimirskaya mine in will allow the Company to significantly increase its cash flows in KOKS Group capex program has been optimized to bring risk comfort to our bond investors 8

9 Covenant reset request Rationale Existing covenant of permitted indebtedness (clause 10.1 of the Offering Memorandum) prohibits Borrower and Guarantors from raising additional debt once the Consolidated Leverage is above 3.5x (few additional carve-outs exist) Based on unaudited management accounts, KOKS estimates to have reached the above threshold without breaching the covenant package by year-end Still KOKS will not be able to raise additional debt once its 2012 audited financial accounts are published The threshold of 15% of the ratio of secured debt to total assets as per the Covenant of Permitted Liens (clause 10.2) could be achieved already in 1H 2014, due to drawings of secured investment loans for construction of Butovskaya and Tikhova mines Request Amend clause 10.1 of the Offering Memorandum as follows: Period from 31/12/2012 to 29/06/2013 (inclusive) 4.5x Period from 30/06/2013 to 30/12/2013 (inclusive) 6.5x Period from 31/12/2013 to 29/06/2014 (inclusive) 5.5x Period from 30/06/2014 to 30/12/2014 (inclusive) 4.0x Period from 31/12/2014 onwards 3.5x The threshold of the Covenant of Permitted Liens (clause 10.2) to be amended to 25% of secured debt to total assets for the period from 01/01/2014 onwards 9

10 Bondholders advantages of consenting to request to reset covenant Improved cash flow and risk profile of KOKS due to ability to finalise strategic capex programme: Increased cash generation from 2H 2013 onwards due to commissioning of: Butovskaya mine in 1H 2013 Lutuginskiy seam at Vladimirskaya mine in 2H 2013 Tikhova mine in 2H 2014 Increasing level of vertical integration and self-sufficiency improves the Company s competitive cost position and provides a cushion against future input price shocks Reduction of costs associated with maintaining unused production capacity and undrawn committed financing in relation to unfinished mines The entities holding the Butovskaya and Tikhova mines are intended to accede as Guarantors under the Eurobond documentation. Any increase in the asset value of the Butovskaya and Tikhova mines due to the planned investments would increase the value of such Guarantees Attractive remuneration to consenting bondholders: 150 bps ( Early Bird Fee ) for consent given no later than 3.00 p.m. (London time) on 4 March bps for consent given after 3.00 p.m. (London time) on 4 March 2013, but before 3.00 p.m. (London time) on 13 March 2013 In addition to the attractive remuneration offered, investors have a chance to improve the cash flow, asset base and risk profile of their investment in KOKS Group 10

11 Timetable of Consent Solicitation 19/02 Launch of Consent Solicitation 04/03 Early Bird Fee Deadline 13/03 Expiration of Consent Solicitation 15/03 Noteholders Meeting 22/03 Settlement Date 11

12 Important Notice This presentation must be read in conjunction with the consent solicitation memorandum published by KOKS Finance Limited (the "Issuer") at the request of OAO "KOKS" (the "Company") on 19 February 2013 (the "Consent Solicitation Memorandum"). To the extent that any inconsistencies exist between this presentation and the Consent Solicitation Memorandum, the text of the Consent Solicitation Memorandum shall prevail. The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about, and to observe, any such restrictions. This presentation does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or a solicitation of any offer to sell or subscribe for, any securities of the Issuer, the Company or any other entity. No Reliance No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on its accuracy or completeness and readers of this presentation should conduct their own investigation and analysis of the business, assets and property of the Group. Save in the case of fraudulent misrepresentation, no representation or warranty, express or implied, is made or given by or on behalf of the Issuer, the Company or any other member of the Group, or any of their respective directors, officers, partners, employees or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for any such information or opinions or for any loss howsoever arising from any use of, or reliance on, this presentation. Forward-Looking Statements This presentation includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms believes, estimates, anticipates, projects, forecast, continues, likely, expects, intends, plans, may, will, seeks or should or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. There can be no assurance that (i) the Group has correctly measured or identified all of the factors affecting its business or the extent of their likely impact, (ii) the publicly available information with respect to these factors on which the Group s analysis is based is complete or accurate, (iii) the Group's analysis is correct or (iv) the Group s strategy, which is based in part on this analysis, will be successful. As a result of this and other factors, the Group's actual results of operations, performance, achievements, financial condition and liquidity, and the development of the industry in which the Group operates, may differ materially from those expressed or implied by the forward-looking statements contained in this presentation. In addition, even if the Group s results of operations, performance, achievements, financial condition and liquidity, and the development of the industry in which the Group and its subsidiaries operate, are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in subsequent periods. Forward-looking statements in this presentation speak only as of the date of this presentation. Other than in accordance with the Group's obligations under any applicable law, regulation and/or stock exchange rules, the Group undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 12

PRESS RELEASE. IMH announces 6M 2017 financial results

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