Prospectus RASP 2017

7/29/2019 Prospectus RASP 2017

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IMPORTANT NOTICE

IMPORTANT: You must read the following disclaimer before continuing. The following disclaimerapplies to the attached Prospectus (the Prospectus) and you are advised to read this disclaimer carefullybefore reading, accessing or making any other use of the attached Prospectus. In accessing the Prospectusyou agree to be bound by the following terms and conditions, including any modifications to them fromtime to time, each time you receive any information from the Issuer, the Company (as defined below) orthe Joint Lead Managers (each as defined below) as a result of such access. The Prospectus is intended for

the addressee only.NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES

FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TODO SO. THE NOTES DESCRIBED IN THE PROSPECTUS (THE NOTES) HAVE NOT BEEN, ANDWILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, ASAMENDED (THE SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OF THEUNITED STATES OR OTHER JURISDICTION AND THE SECURITIES DESCRIBED IN THEATTACHED PROSPECTUS MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES ORTO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION SUNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES

ACT AND APPLICABLE STATE OR LOCAL SECURITIES LAWS.

THE PROSPECTUS MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON

AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. ANY FORWARDING,REDISTRIBUTION OR REPRODUCTION OF THE PROSPECTUS IN WHOLE OR IN PART ISUNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATIONOF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. IF YOU HAVEGAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE FOREGOINGRESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO PURCHASE ANY OFTHE NOTES.

Confirmation of your Representation: In order to be eligible to view the Prospectus or make aninvestment decision with respect to the securities described in the Prospectus, investors must comply withthe following provisions. You have been sent the Prospectus on the basis that you have confirmed to

Goldman Sachs International, Morgan Stanley & Co. International plc, TD Investments Limited and VTBCapital plc (the Joint Lead Managers), being the senders of the attached Prospectus, that:

(a) you (and each investor that you represent) are either: (A) not a U.S. person (as such term isdefined in Regulation S under the Securities Act), are not investing in the Rule 144A Note andthe electronic mail address that you have given to us and to which this electronic transmission hasbeen sent is not located in the United States; or (B) a qualified institutional buyer (as suchterm is defined in Rule 144A under the Securities Act) (a QIB) that is also a qualifiedpurchaser (within the meaning of Section 2(a)(51) of the United States Investment CompanyAct of 1940, as amended) (a QP);

(b) you consent to delivery to you of the Prospectus by electronic transmission;

(c) you are a prospective purchaser of the Notes and you are a relevant person (as defined below) if

in the United Kingdom;(d) you will not transmit the Prospectus (or any copy of it or part thereof) or disclose, whether orally

or in writing, any of its contents to any other person except with the consent of a Joint LeadManager; and

(e) you acknowledge that the Prospectus does not constitute an offer of or an invitation to subscribefor or purchase any of the Notes.

By accepting this electronic transmission and accessing the Prospectus, you shall be deemed to havemade the above representation and that you consent to delivery of the Prospectus by electronictransmission.

The Prospectus has been prepared solely in connection with the proposed offering to certaininstitutional and professional investors of the Notes and is not in final form. In particular, the Prospectus

refers to certain events as having occurred that have not occurred at the date it is made available but thatare expected to occur prior to publication of the final prospectus. The Prospectus is an advertisement andnot a prospectus prepared in accordance with Directive 2003/71/EC (the Prospectus Directive) andinvestors should not subscribe for or purchase securities except on the basis of information in the final


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prospectus. Copies of the final prospectus will, following publication, be made available to the public inaccordance with the applicable rules. Although it is intended that the final prospectus will be approved as aprospectus prepared in accordance with the Prospectus Directive, the Prospectus has not been soapproved. Similarly, although it is intended that the final prospectus will be made available to the public inaccordance with the Prospectus Directive, the Prospectus has not been made available in accordancetherewith.

The Prospectus does not constitute, and may not be used in connection with, an offer or solicitation in

any jurisdiction or place where offers or solicitations are not permitted by law. If a jurisdiction requiresthat the offering be made by a licensed broker or dealer and the Joint Lead Managers or any affiliate ofthe Joint Lead Managers is a licensed broker or dealer in that jurisdiction, any offering of Notes in suchjurisdiction shall be deemed to be made by the Joint Lead Managers or such affiliate on behalf of theIssuer.

None of the Issuer, the Company or the Joint Lead Managers or their respective representatives oraffiliates makes any representation regarding the legality of an investment by any offeree or purchaserunder any investment or similar laws. Prospective investors should consult their own advisers as to thelegal, tax, business, financial and other aspects of any purchase of the Notes.

The Prospectus is only addressed to and directed at persons in member states of the EuropeanEconomic Area that have implemented the Prospectus Directive who are qualified investors within themeaning of Article 2(1)(e) of the Prospectus Directive (Qualified Investors). In addition, the Prospectusis directed solely at (i) persons outside the United Kingdom, (ii) persons with professional experience inmatters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000(Financial Promotion) Order 2005 as amended (the Order), (iii) high net worth entities, or (iv) anyother persons to whom an invitation or inducement to engage in investment activities may lawfully becommunicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i)-(iv) above beingRelevant Persons). Any investment activity to which this communication relates will only be available toand will only be engaged with relevant persons. Any person who is not a relevant person should not act orrely on this communication.

The Prospectus and information contained therein do not constitute an advertisement, an offer or aninvitation to make offers, sell, purchase, exchange or transfer any securities in Russia or to or for thebenefit of any Russian person (including legal entities) resident, incorporated, established or having their

usual residence in the Russian Federation or to any person located within the territory of the RussianFederation, unless and to the extent otherwise permitted under Russian law, and must not be madepublicly available in Russia. The Notes have not been and will not be admitted to placement and/or publiccirculation in Russia and are not intended for offering, advertising, placement or circulation(each as defined in Russian securities laws) in the Russian Federation except as permitted by Russian law.

The Prospectus has been delivered to you on the basis that you are a person into whose possession theProspectus may be lawfully delivered in accordance with the laws of the jurisdiction in which you arelocated.

The Prospectus has been sent to you in an electronic form. You are reminded that documentstransmitted via this medium may be altered or changed during the process of electronic transmission andconsequently none of Raspadskaya Securities Limited (the Issuer), Open Joint-Stock CompanyRaspadskaya (the Company, and the Company and its subsidiaries taken as a whole being the Group)

or the Joint Lead Managers, or any person who controls them, or any director, officer, employee or agentof any of them, or their respective affiliates accepts any liability or responsibility whatsoever in respect ofany difference between the attached Prospectus distributed to you in electronic format and the hard copyversion available to you on request from the Joint Lead Managers. You are responsible for protectingagainst viruses and other destructive items. Your use of this electronic communication is at your own riskand it is your responsibility to take precautions to ensure that it is free from viruses and other items of adestructive nature. Please ensure your copy is complete.

You are reminded that no representation or warranty, expressed or implied, is made or given by or onbehalf of the Joint Lead Managers, nor any person who controls the Joint Lead Managers or any director,officer, employee or agent of any of them, or their respective affiliates as to the accuracy, completeness orfairness of the information or opinions contained in the Prospectus and such persons do not acceptresponsibility or liability for any such information or opinions.

Neither this electronic transmission nor the Prospectus constitutes or contains any offer to sell orinvitation to subscribe or make commitments for or in respect of any securities in any jurisdiction wheresuch an offer or invitation would be unlawful.


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26MAR201212422464

US$400,000,0007.75 per cent. Loan Participation Notes due 2017

Issued by, but without recourse to,

RASPADSKAYA SECURITIES LIMITED(incorporated under the laws of Ireland)for the sole purpose of financing a loan to

OPEN JOINT-STOCK COMPANY RASPADSKAYA(incorporated under the laws of the Russian Federation)

Issue Price: 100 per cent.Raspadskaya Securities Limited (the Issuer or the Lender is issuing US$400,000,000 in aggregate principal amount of 7.75 per cent. Loan

Participation Notes due 2017 (the Notes). The Notes are limited recourse secured obligations of the Issuer, and are being offered for the sole purposeof funding a five-year loan (the Loan) to Open Joint-Stock Company Raspadskaya (the Company or the Borrower) pursuant to a loan agreement(the Loan Agreement) dated 20 April 2012 between the Issuer and the Company. The Notes will be constituted by, be subject to, and have the benefitof, a trust deed (the Trust Deed) to be dated on or about 27 April 2012 (the Closing Date) between the Issuer and Citibank, N.A., London Branch,as trustee (the Trustee), for the holders of the Notes from time to time (the Noteholders). The Issuer will charge by way of first fixed charge assecurity for its payment obligations in respect of the Notes its right to principal, interest and other amounts as lender under the Loan Agreement and itsrights, title and interest to certain sums of money held in an account in its name with Citibank, N.A., London Branch, in each case other than theReserved Rights (as defined in the Trust Deed) and certain amounts relating to the Reserved Rights, to the Trustee. The Issuer will also assign itsadministrative rights under the Loan Agreement to the Trustee.

The Notes are limited recourse secured obligations of the Issuer. In each case where amounts of principal, interest and additional amounts (if any)are stated to be payable in respect of the Notes, the obligation of the Issuer to make any such payment shall constitute an obligation only to account tothe Noteholders, on each date upon which such amounts of principal, interest and additional amounts (if any) are due in respect of the Notes, for anamount equivalent to all principal, interest and additional amounts (if any) actually received and retained (net of tax) by, or for the account of, the Issuerpursuant to the Loan Agreement. The Issuer will have no other financial obligations under the Notes. Noteholders will be deemed to have accepted andagreed that they will be relying solely and exclusively on the covenant to pay under the Loan Agreement and the credit and financial standing of theCompany in respect of the financial servicing of the Notes.

Subject to receipt by the Issuer of amounts pursuant to the Loan Agreement, interest on the Notes will be payable semi-annually in arrear inequal instalments on 27 April and 27 October in each year commencing on 27 October 2012 as described under Terms and Conditions of the NotesInterest. The Loan will bear interest of 7.75 per cent. per annum. Unless previously redeemed or cancelled, the Notes will be redeemed at their principalamount on 27 April 2017.

Except as set forth herein (see Tax Considerations), payments by the Issuer of the Notes will be made without any deduction or withholding for oron account of taxes of Ireland, and payments by the Borrower under the Loan will be made without any deduction or withholding for or on account oftaxes of the Russian Federation or Ireland as more fully set out, and subject to the conditions of, the Loan Agreement. The principal amount of the Loanmay be prepaid, together with accrued interest, at the option of the Company upon the Company or the Issuer being required to deduct or withhold anyRussian or Irish taxes from payments to be made by them in respect of the Notes or pursuant to the Loan Agreement, or following enforcement of thesecurity created in the Trust Deed, or upon the Trustee being required to deduct or withhold any taxes of the Russian Federation or the jurisdiction inwhich the Trustee is then resident. As set out in the Loan Agreement, the Loan may also be prepaid if it becomes unlawful for the Loan or the Notes toremain outstanding and thereupon (subject to the receipt of the relevant funds from the Company) the principal amount of all outstanding Notes will beprepaid by the Issuer, together with accrued interest.

AN INVESTMENT IN THE NOTES INVOLVES A HIGH DEGREE OF RISK. INVESTORS SHOULDCAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 17 OF THIS PROSPECTUS BEFOREINVESTING IN THE NOTES.

THE NOTES AND THE LOAN (TOGETHER, THE SECURITIES) HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE U.S.SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATEOR OTHER JURISDICTION OF THE UNITED STATES AND, EXCEPT PURSUANT TO CERTAIN EXEMPTIONS, MAY NOT BE OFFERED ORSOLD WITHIN THE UNITED STATES OR TO, FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDERTHE SECURITIES ACT (REGULATION S). THE NOTES MAY BE OFFERED AND SOLD (I) WITHIN THE UNITED STATES TO QUALIFIEDINSTITUTIONAL BUYERS (QIBs), AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (RULE 144A), THAT ARE ALSO QUALIFIEDPURCHASERS (QPs), AS DEFINED IN SECTION 2(A)(51) OF THE U.S. INVESTMENT COMPANY ACT OF 1940 (THE INVESTMENTCOMPANY ACT) IN RELIANCE ON THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144A (THE RULE 144A NOTES) AND(II) TO NON-U.S. PERSONS IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT (THEREGULATION S NOTES). THE ISSUER HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE INVESTMENT COMPANY ACT.PROSPECTIVE PURCHASERS ARE HEREBY NOTIFIED THAT SELLERS OF THE RULE 144A NOTES MAY BE RELYING ON THE EXEMPTIONFROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A. FOR A DESCRIPTION OF THESE ANDCERTAIN FURTHER RESTRICTIONS ON OFFERS, SALES AND TRANSFERS OF THE NOTES AND DISTRIBUTION OF THIS PROSPECTUS,SEE SUBSCRIPTION AND SALE AND TRANSFER RESTRICTIONS.

There is currently no public market for the Notes. The Prospectus has been approved by the Central Bank of Ireland (the Central Bank) ascompetent authority under Directive 2003/71/EC (the Prospectus Directive). The Central Bank only approves this Prospectus as meeting therequirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange Limited(the Irish Stock Exchange) for the Notes to be admitted to the official list of the Irish Stock Exchange (the Official List) and trading on itsregulated market (the Main Securities Market). References in this Prospectus to the Notes being listed (and all related references) shall mean that theNotes have been admitted to the Official List and have been admitted to trading on the Main Securities Market. The Main Securities Market is aregulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial institutions.

The Notes will be in registered form. The Notes may be held and transferred, and will be offered and sold, in the principal amount of US$200,000and integral multiples of US$1,000 in excess thereof. Notes that are offered and sold outside the United States to non-U.S. persons in reliance onRegulation S will be represented by interests in a global registered note (the Regulation S Global Note) deposited with a common depositary (theCommon Depositary) for, and registered in the name of, a nominee of Euroclear Bank SA/NV (Euroclear) or Clearstream Banking,societe anonyme(Clearstream, Luxembourg) on or about the Closing Date. Notes which are offered and sold in the United States to QIBs that are also QPs in reliance onRule 144A will be represented by interests in a global registered note (the Rule 144A Global Note and, together with the Regulation S Global Note,the Global Notes) deposited with a custodian for, and registered in the name of, a nominee of The Depository Trust Company ( DTC) on or aboutthe Closing Date. Interests in the Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by DTC,Euroclear and Clearstream, Luxembourg and their respective participants. Individual notes in definitive form (the Definitive Notes) evidencingholdings of Notes will only be available in certain limited circumstances. See Summary of the Provisions Relating to the Notes in Global Form.

The Notes are expected to be rated B1 by Moodys Investors Service, Inc. (Moodys) and B+ by Fitch Ratings Limited (Fitch). Moodys is notestablished in the European Union and is not registered under Regulation (EC) No. 1060/2009 on credit rating agencies (the CRA Regulation). Theratings issued by Moodys are endorsed in accordance with the CRA Regulation by Moodys Investors Service Ltd. which is established in the EuropeanUnion and registered under the CRA Regulation. Fitch is established in the European Union and is registered under the CRA Regulation. The list ofcredit rating agencies registered in accordance with the CRA Regulation is available on the European Securities and Market Authoritys website(http://www.esma.europa.eu/page/List-registered-and-certified-CRAs).

Joint Lead Managers

Goldman Sachs Morgan Stanley Troika Dialog VTB CapitalInternational

Prospectus dated 23 April 2012


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This document comprises a prospectus for the purposes of the Prospectus Directive as implemented inIreland by the Prospectus (Directive 2003/71/EC) Regulations 2005 (the Prospectus Regulations) andhas been prepared for the purpose of giving information with regard to the Issuer, the Company and theCompany and its subsidiaries taken as a whole (the Group) which, according to the particular nature ofthe Issuer, the Company, the Group, the Notes and the Loan, is necessary to enable investors to make aninformed assessment of the assets and liabilities, financial position, profit and losses and prospects of theIssuer and the Company. Each of the Issuer and the Company (whose registered office is set out onpage 13 of this Prospectus) accepts responsibility for the information contained in this Prospectus. To thebest of the knowledge of each of the Issuer and the Company (having taken all reasonable care to ensurethat such is the case) the information contained in this Prospectus is in accordance with the facts and doesnot omit anything likely to affect the import of such information.

In addition, the Company, having made all reasonable enquiries, confirms that (i) this Prospectuscontains all information with respect to the Company, the Group, the Loan and the Notes that is materialin the context of the issue and offering of the Notes; (ii) the statements contained in this Prospectusrelating to the Company and the Group are in every material particular true and accurate and are notmisleading; (iii) the opinions, expectations and intentions expressed in this Prospectus with regard to theCompany and the Group are honestly held, have been reached after considering all relevant circumstancesand are based on reasonable assumptions; (iv) there are no other facts in relation to the Company, theGroup, the Loan or the Notes, the omission of which would, in the context of the issue and offering of the

Notes, make any statement in this Prospectus misleading in any material respect; and (v) all reasonableenquiries have been made by the Company to ascertain such facts and to verify the accuracy of all suchinformation and statements. Accordingly, save as set out in the immediately preceding sentence and below,the Company accepts responsibility for the information contained in this Prospectus.

None of the Joint Lead Managers named under Subscription and Sale (the Joint Lead Managers) orthe Trustee makes any representation or warranty, express or implied, as to the accuracy or completenessof the information in this Prospectus. Each person receiving this Prospectus acknowledges that such personhas not relied on any Joint Lead Manager or the Trustee or any person affiliated with any Joint LeadManager or the Trustee, in connection with its investigation of the accuracy of such information or itsinvestment decision. Each person contemplating making an investment in the Notes must make its owninvestigation and analysis of the creditworthiness of the Company and its own determination of thesuitability of any such investment, with particular reference to its own investment objectives and

experience, and any other factors that may be relevant to it in connection with such investment. ThisProspectus may only be used for the purpose for which it has been published.

To the fullest extent permitted by law, the Joint Lead Managers accept no responsibility whatsoeverfor the contents of this Prospectus or for any other statement made, or purported to be made, by the JointLead Managers or on their behalf in connection with the Issuer, the Company or the issue and offering ofthe Notes. The Joint Lead Managers accordingly disclaim all and any liability whether arising in tort orcontract or otherwise (save as referred to above) which they might otherwise have in respect of thisProspectus or any such statement.

The Prospectus does not constitute an offer of, or an invitation by or on behalf of, the Issuer, theCompany or the Joint Lead Managers to subscribe or purchase any Notes. The distribution of thisProspectus and the offering of the Notes in certain jurisdictions may be restricted by law. Persons intowhose possession this Prospectus comes are required by the Issuer, the Company and the Joint LeadManagers to inform themselves about and to observe any such restrictions. The Securities have not beenand will not be registered under the Securities Act. The Notes may not be offered or sold within the UnitedStates or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, in atransaction not subject to, the registration requirements of the Securities Act. The Notes are being offeredand sold outside the United States to non U.S. persons in reliance on Regulation S and within the UnitedStates to QIBs that are also QPs in reliance on the exemption from registration under the Securities Actprovided by Rule 144A. Prospective purchasers are hereby notified that sellers of the Notes may be relyingon the exemption from the provision of Section 5 of the Securities Act provided by Rule 144A. For adescription of these and certain further restrictions on offers, sales and transfers of the Notes anddistribution of this Prospectus, see Subscription and Sale and Transfer Restrictions.

The information provided in this Prospectus is not an offer, or an invitation to make offers, to sell,exchange or otherwise transfer the Notes in the Russian Federation or to, or for the benefit of, any Russian

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person or entity. No person should at any time carry out any activities in breach of the restrictions set outin Subscription and SaleRussian Federation.

None of the Issuer, the Company, the Trustee or the Joint Lead Managers makes any representationregarding the legality of an investment by any offeree or purchaser under any legal investment or similarlaws. Prospective investors should consult their own advisers as to the legal, business, financial and otheraspects of any purchase of the Notes.

Neither the Issuer nor the Company intends to provide any post-issuance or transaction reportingregarding the Notes or the performance of the Loan. No person is authorised to provide any informationor to make any representation not contained in this Prospectus and any information or representation notso contained must not be relied upon as having been authorised by or on behalf of the Issuer, theCompany, the Trustee or the Joint Lead Managers. The delivery of this document at any time does notimply that the information contained in it is correct as at any time subsequent to its date.

Neither the delivery of this Prospectus nor the offer, sale or delivery of any Note shall in anycircumstances create any implication that there has been no adverse change, or any event reasonably likelyto involve any adverse change, in the condition (financial or otherwise) of the Company since the date ofthis Prospectus.

In connection with the issue of the Notes, VTB Capital plc (the Stabilising Manager) (or any personacting on behalf of the Stabilising Manager) may over-allot Notes or effect transactions with a view to

supporting the market price of the Notes at a level higher than that which might otherwise prevail. However,there is no assurance that the Stabilising Manager (or any person acting on behalf of the StabilisingManager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on

which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be endedat any time, but it must end no later than the earlier of 30 days after the Closing Date and 60 days after thedate of the allotment of the Notes. Any stabilisation action or over-allotment shall be conducted inaccordance with all applicable laws and rules

The Prospectus will be filed with and approved by the Central Bank as required by the ProspectusRegulations. The Prospectus approved by the Central Bank will be filed with the Irish CompaniesRegistration Office in accordance with Regulation 38(1)(b) of the Prospectus Regulations.

The Issuer is not and will not be regulated by the Central Bank as a result of issuing the Notes. Any

investment in the Notes does not have the status of a bank deposit and is not within the scope of thedeposit protection scheme operated by the Central Bank.

The contents of any websites referred to in this Prospectus do not form part of this Prospectus.

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NOTICE TO U.S. INVESTORS

EACH PROSPECTIVE PURCHASER OF RULE 144A NOTES OR BENEFICIAL INTERESTSTHEREIN, BY ACCEPTING DELIVERY OF THIS PROSPECTUS, SHALL BE DEEMED TO HAVEACKNOWLEDGED AND AGREED THAT SUCH PROSPECTUS IS PERSONAL TO IT AND DOESNOT CONSTITUTE AN OFFER TO ANY OTHER PERSON OR TO THE PUBLIC GENERALLYTO SUBSCRIBE FOR OR OTHERWISE ACQUIRE SUCH NOTES OTHER THAN PURSUANT TORULE 144A. DISTRIBUTION OF THIS PROSPECTUS, OR DISCLOSURE OF ANY OF ITS

CONTENTS TO ANY PERSON OTHER THAN SUCH OFFEREE AND THOSE PERSONS, IF ANY,RETAINED TO ADVISE IT WITH RESPECT THERETO IS UNAUTHORISED AND ANYDISCLOSURE OF ANY OF ITS CONTENTS, WITHOUT THE PRIOR WRITTEN CONSENT OFTHE ISSUER, IS PROHIBITED. NOTWITHSTANDING ANYTHING HEREIN TO THECONTRARY, EXCEPT AS REASONABLY NECESSARY TO COMPLY WITH APPLICABLESECURITIES LAWS, INVESTORS (AND EACH EMPLOYEE, REPRESENTATIVE OR OTHERAGENT OF THE INVESTORS) MAY DISCLOSE TO ANY AND ALL PERSONS, WITHOUTLIMITATION OF ANY KIND, THE U.S. FEDERAL TAX TREATMENT AND U.S. FEDERAL TAXSTRUCTURE OF THE OFFERING AND ALL MATERIALS OF ANY KIND (INCLUDINGOPINIONS OR OTHER TAX ANALYSES) THAT ARE PROVIDED TO THE INVESTORSRELATING TO SUCH U.S. FEDERAL TAX TREATMENT AND U.S. FEDERAL TAXSTRUCTURE (AS SUCH TERMS ARE DEFINED FOR PURPOSES OF SECTIONS 6011, 6111 AND

6112 OF THE U.S. INTERNAL REVENUE CODE AND THE TREASURY REGULATIONSPROMULGATED THEREUNDER).

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR ALICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISEDSTATUTES (RSA) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT ASECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OFNEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEWHAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE ANDNOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OREXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE

SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONSOF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY ORTRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANYPROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATIONINCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

UNITED STATES INTERNAL REVENUE SERVICE CIRCULAR 230 DISCLOSURE

PURSUANT TO UNITED STATES INTERNAL REVENUE SERVICE CIRCULAR 230, YOUARE HEREBY INFORMED THAT THE DESCRIPTION SET FORTH HEREIN WITH RESPECTTO UNITED STATES FEDERAL TAX ISSUES WAS NOT INTENDED OR WRITTEN TO BE USED,AND SUCH DESCRIPTION CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OFAVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON THEM UNDER THE UNITED

STATES INTERNAL REVENUE CODE. SUCH DESCRIPTION WAS WRITTEN TO SUPPORTTHE PROMOTION OR MARKETING BY THE ISSUER OF THE TRANSACTIONS OR MATTERSADDRESSED HEREIN. TAXPAYERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULARCIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

ADDITIONAL INFORMATION

Neither the Issuer nor the Company is required to file periodic reports under Section 13 or 15 of theU.S. Securities Exchange Act of 1934, as amended (the Exchange Act). For so long as either the Issueror the Company is not a reporting company under Section 13 or 15(d) of the Exchange Act, or exemptfrom reporting pursuant to Rule 12g3-2(b) thereunder, the Issuer or the Company, as the case may be, will,upon request, furnish to each holder or beneficial owner of Notes that are restricted securities (withinthe meaning of Rule 144(a)(3) under the Securities Act) and to each prospective purchaser thereof

designated by such holder or beneficial owner upon request of such holder, beneficial owner or prospective

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purchaser, in connection with a transfer or proposed transfer of any such Notes pursuant to Rule 144A orotherwise, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

The language of the Prospectus is English. Certain legislative references and technical terms havebeen cited in their original language in order that the correct technical meaning may be ascribed to themunder applicable law.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

This document includes audited historical consolidated financial statements of the Group as at and forthe years ended 31 December 2011, 2010 and 2009 (Financial Statements) prepared in accordance withInternational Financial Reporting Standards (IFRS) as promulgated by the International AccountingStandards Board (IASB).

Currencies. In this Prospectus, references to roubles are to the lawful currency for the time being

of the Russian Federation, references to U.S. dollars and US$ are to the lawful currency for the timebeing of the United States of America, references to euro and E are to the lawful currency for the timebeing of the member states of the European Union that adopted the single currency in accordance with theTreaty of Rome establishing the European Economic Community, as amended from time to time, andreferences to Great Britain pound sterling are to the lawful currency of the United Kingdom of GreatBritain and Northern Ireland.

The Groups functional currency is the rouble, as it reflects the economic substance of its operations.The Groups presentation currency is the U.S. dollar. The Financial Statements and the Groups financialinformation included elsewhere in this Prospectus have, unless otherwise notes, been presented in U.S.dollars. The rouble/U.S. dollar exchange rate, published by the Central Bank of Russia (the CBR), was32.1961 roubles per US$1.00 as of 31 December 2011, 30.4769 roubles per US$1.00 as of 31 December2010 and 30.2442 roubles per US$1.00 as of 31 December 2009. As at the close of business on 10 April

2012 (being the last practicable date prior to the finalisation of this Prospectus), the rouble/U.S. dollarexchange rate was 29.6358 roubles per US$1.00. No representation is made that the rouble or U.S. dollaramounts referred to herein could have been or could be converted into roubles or U.S. dollars, as the casemay be, at these rates, at any particular rate or at all.

Rounding. Certain figures included in this Prospectus have been subject to rounding adjustments;accordingly, figures shown for the same category presented in different tables may vary slightly and figuresshown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Information not specifically defined by IFRS. The Company has included certain measures in thisProspectus that are not measures specifically defined by IFRS. These include Adjusted EBITDA, AdjustedEBITDA margin, cash cost of production and net indebtedness (or net cash position). The Company hasincluded these measures for the reasons described below; however, these measures should not be used

instead of, or considered as alternatives to, its historical financial results based on IFRS.The Company defines Adjusted EBITDA as profit for the year before foreign exchange gains or

losses; change in bad debt allowance; depreciation, depletion and amortisation; dividend income; interestincome and expense; gain from a bargain purchase of subsidiary, extraordinary loss on disposal ofproperty, plant and equipment and income tax expense. Adjusted EBITDA is not a measure defined byIFRS, is not a measure of financial condition, liquidity or profitability and should not be considered as analternative to profit for the year determined in accordance with IFRS or operating cash flows determinedin accordance with IFRS. Additionally, Adjusted EBITDA is not intended to be a measure of free cashflow for the managements discretionary use, as it does not take into account certain items such asinvestments in the Groups associates, interest and principal payments on the Groups indebtedness,depreciation and amortisation expenses (because the Group uses capital assets, depreciation andamortisation expenses, it is a necessary element of the Groups costs and ability to generate revenue),

working capital needs and tax payments (because the payment of taxes is part of the Groups operations, itis a necessary element of the Groups costs and ability to operate). The Groups management believes thatinclusion of Adjusted EBITDA is appropriate to provide additional information to investors about theGroups performance and to provide a measure of results of operations unaffected by differences in capitalstructures, capital investment cycles and ages of related assets among otherwise comparable companies.Because not all companies calculate Adjusted EBITDA or similarly entitled measures identically, thispresentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

The Company defines Adjusted EBITDA margin as Adjusted EBITDA divided by revenue.

The Company defines cash cost of production as cost of sales before transportation costs, cost ofresold goods, cost of rendering services, change in finished goods, and depreciation, depletion andamortisation. The Group presents cash cost of production and other measures calculated using cash cost ofproduction because the Groups management considers them important supplemental measures of theGroups operating performance and believes that they are frequently used by securities analysts, investors

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and other interested parties in the evaluation of companies in the coal mining industry. Cash cost ofproduction and other measures calculated using cash cost of production have limitations as analytical tools,and potential investors should not consider them in isolation, or as a substitute for analysis of the Groupsresults of operations as reported under IFRS. The Groups management believes that it compensates forthese limitations by relying primarily on the Groups IFRS results of operations and using cash costmeasures only supplementally. Cash cost of production and other measures calculated using cash cost ofproduction are measures of the Groups operating performance that are not required by, or presented inaccordance with, IFRS. Cash cost of production and other measures calculated using cash cost ofproduction are not measurements of the Groups operating performance under IFRS and should not beconsidered as an alternative to profit for the year, operating profit or any other performance measuresderived in accordance with IFRS.

Net indebtedness/(net cash position) represents loans less deposits and cash and cash equivalents. TheGroups management presents net indebtedness/(net cash position) because it considers it an importantsupplemental measure of the Groups financial condition. Net indebtedness/(net cash position) is not ameasure defined by IFRS, is not a measure of financial condition or liquidity and should not be consideredin isolation from, or as a substitute for, the Groups financial condition as reported under IFRS.

Reserve information. IMC Group Consulting Limited (IMC), an international mining consultant,has produced a report (the Mineral Experts Report) dated 31 March 2012 on the coal assets of theGroup as of 31 December 2011 in accordance with the criteria for internationally recognised reserve and

resource categories of the Australasian Code for Reporting Mineral Resources and Ore Reserves (2004)published by the Joint Ore Reserves Committee (JORC) of the Australasian Institute of Mining andMetallurgy, Australian Institute of Geoscientists and the Minerals Council of Australia (the JORCCode). Data in respect of the Groups reserves included in this Prospectus have been extracted from theMineral Experts Report which is set out in full in appendix A to this Prospectus. In preparing the MineralExperts Report, IMC independently assessed the coal assets of the Group by reviewing pertinent data,including resources, reserves, manpower requirements, environmental issues and the life-of-mine plansrelating to productivity, production, operating costs, capital expenditures and revenues. However,estimation of reserves is a subjective process of estimating underground accumulations of coal that cannotbe measured in an exact manner. These estimates necessarily depend upon a number of variable factorsand assumptions, many of which are beyond the Groups control. Due to the inherent uncertainties and thenecessarily imprecise nature of reserves estimates the reserves amounts disclosed in this Prospectus may

change as additional information becomes available and investors should not place undue reliance on theability of the reserves estimates included in this Prospectus to predict actual reserves.

Market Data. Market data used in this Prospectus, including statistics in respect of the Groupscompetitors sales volumes and market share, has been extracted from official and industry sources andother sources the Groups management believes to be reliable. This information has been accuratelyreproduced and as far as the Issuer and the Company is aware no facts have been omitted which wouldrender the reproduced information inaccurate or misleading. This information appears throughout theProspectus including, without limitation, in the sections headed Management Discussion and Analysis ofFinancial Condition and Results of Operation, Industry Overview and Description of the GroupsBusiness, and is sourced in the text or in footnotes where it appears. Such information, data and statisticsmay be approximations or estimates or use rounded numbers.

In particular, the data contained in the section Industry Overview has been sourced from websites ofother companies involved in coking coal extraction and/or coal concentrate production, industrypublications and information from news agencies. The data sourced from websites of other companiesinvolved in coking coal extraction and/or coal concentrate production has been obtained from the websitesof Anglo American, BHP Billiton, Peabody Energy, Rio Tinto, Xtrata, Wesfarmers, Mechel, Severstal andEvraz. The data sourced from industry publications has been obtained from the following sources: Ernst &Young (Global Steel2011 Trends, 2012 Outlook), Citigroup Global Markets (2012 CommodityOutlook, 8 January 2012), SourceWatch (Global Use and Production of Coal), Steelease Information &Technology Co., Ltd. (China Coking Coal and Coke Weekly Monitor), the Coke Market Survey AnnualReport (November 2011), the China Steel Information Centre and Industry Database, glObserver(Mongolia Leads Coking Coal Exports in China in 2011), British Petroleum (Review of World EnergyJune 2011), Delovoy Kuzbass (Belon by 2017 Plans to Increase its Coal Mining by 71 per cent. and itsProduction of Coal Concentrate by 65 per cent.), Ugolinfo (Coal Output in Russia by Type of Coal),www.Mineral.ru, www.metcoal.ru (Matrix of Coal Concentrate Exports), Coal Investing News (2012

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Coal Market Outlook), Rusmet.ru (Metallurgical Industry of Russia), www.stanlib.com (InterestingChart No. 62: ChinaWorlds Largest Consumer of Energy at 20.3 per cent. of Global Demand), theIEA World Energy Outlook 2010 (Coal-fired Electricity Generation by Region), www.caijing.com.cn(Coal Transport Deficiencies Undermine Chinas Market Economic System), Steel Orbis (WISCOappeals for official approval of Fangcheng Port Steel Base Project), the China Balance Sheet Project(China Energya Guide for the Perplexed), the World Steel Association (World Crude Steel OutputIncreases by 6.8 per cent.), www.m.ceip.org and www.chinaccm.com/k1. The data sourced from othernews agencies has been obtained from the following sources: Thomson Reuters (Chinas Top CoalProvince to Trim Coal Output), Interfax (Kailuan Group Positioned to Replace Hebei Steel Unit inCaofeidian Project), Gazeta.ru (Tavan-Tolgoi Did Not Make It to Hong Kong), Fox Business(Mongolia National Security Council Rejected Tavan Tolgoi Plan), Nezavicimaya at www.ng.ru(Elegestskoe Vozrozhdenie Tuvy), www.sibir.ria.ru (Itera Sells its Coal Asset in the ZabaikalskiyRegion) and www.infox.ru. The Issuer and the Company confirm that this data has been accuratelyreproduced and, so far as they are aware and have been able to ascertain from that published information,no facts have been omitted which would render the reproduced information inaccurate or misleading.However, in the preparation of this Prospectus, this third party information has not been independentlyverified nor has there been any investigation of the validity or the methodology of, or the basis used by, thethird parties in producing such data or making estimates and forecasts. The Issuer, the Company, anymember of the Group and the Managers cannot give any assurance that any such information is accurateor, in respect of projected data, that such projections have been based on correct information and

assumptions or that they will prove to be accurate.

Some of the market data contained in this document have been derived from the official data ofRussian government agencies, including the Central Bank of the Russian Federation (CBR), the FederalState Statistics Service of the Russian Federation (Rosstat), and the Federal State Unitary EnterpriseCentral Dispatching Department of Fuel and Energy Complex. The official data published by Russianfederal, regional and local governments are substantially less complete or researched than those ofWestern countries. Official statistics may also be produced on different bases than those used in Westerncountries. Any discussion of matters relating to Russia in this Prospectus are, therefore, subject touncertainty due to concerns about the completeness or reliability of available official and publicinformation. The veracity of some official data released by the Russian government may be questionable.

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INFORMATION INCORPORATED BY REFERENCE

The information set out below shall be deemed to be incorporated in, and to form part of, thisProspectus provided however that any statement contained in any document incorporated by reference in,and forming part of, this Prospectus shall be deemed to be modified or superseded for the purpose of thisProspectus to the extent that a statement contained herein modifies or supercedes such statement(whether expressly, by implication or otherwise). Any statement so modified or superseded shall not,except as so modified or superseded, constitute a part of this Prospectus.

Copies of documents incorporated by reference in this Prospectus will be made available, free ofcharge, during usual business hours at the registered office of the Issuer and the specified offices of theTrustee and the Principal Paying Agent in London during normal business hours, unless such documentshave been modified or superseded.

Issuers audited historical financial statements as at and for the years ended 31 December 2009 and2010 which have been filed with the Irish Stock Exchange.

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ENFORCEABILITY OF CIVIL LIABILITIES IN RUSSIA

The Company is an Open Joint-Stock Company incorporated under the laws of the RussianFederation. All of its assets are currently located outside the United Kingdom and the United States. Inaddition, all of the directors and executive officers of the Company are residents of countries other thanthe United Kingdom and the United States. As a result, it may not be possible for investors to:

effect service of process within the United Kingdom or the United States upon any of the directorsor executive officers of the Company named in this Prospectus; or

enforce, in courts located within the United Kingdom or the United States, judgments obtained incourts in jurisdictions located outside the United Kingdom and the Unites States against theCompany or any of its respective directors or executive officers in any action.

In addition, it may be difficult for investors to enforce, in original actions brought in courts injurisdictions located outside the United Kingdom or the United States, liabilities predicated upon Englishlaw or U.S. securities laws.

Judgments rendered by a court in any jurisdiction outside the Russian Federation will be recognisedby courts in the Russian Federation only if: (i) an international treaty providing for the recognition andenforcement of judgments in civil cases exists between the Russian Federation and the country where thejudgment is rendered; and/or (ii) a federal law of the Russian Federation provides for the recognition and

enforcement of foreign court judgments. No such treaty exists between the Russian Federation, on the onehand, and the United Kingdom or the United States, on the other hand, for the reciprocal enforcement offoreign court judgments and no relevant federal law on enforcement of foreign court judgments has beenadopted in the Russian Federation. However, the Company and the Issuer are also aware of at least twoinstances in which Russian courts have recognised and enforced foreign court judgements (including anEnglish court judgment), on the basis of the principle of reciprocity and (in case of an English courtjudgement) the existence of a number of bilateral and multilateral treaties to which both the UnitedKingdom and the Russian Federation are parties. The courts determined that such treaties constitutedgrounds for the recognition and enforcement of the relevant English court judgment in the RussianFederation. In the absence of established court practice, however, it is difficult to predict whether aRussian court will be inclined in any particular instance to recognise and enforce an English courtjudgment on these grounds. In addition, Russian courts have limited experience in the enforcement offoreign court judgments. These limitations may deprive investors of effective legal recourse for claims

related to their investment in the Notes. The possible need to re-litigate in the Russian Federation ajudgment obtained in a foreign court on the merits may significantly delay the enforcement of suchjudgment.

The Loan Agreement is governed by English Law. The Lender and the Company have agreed that anydispute or difference arising from or in connection with the Loan Agreement shall be settled by arbitrationin accordance with the Rules of the LCIA (formerly known as the London Court of InternationalArbitration) unless the Lender elects, by notice in writing to the Company, to have the dispute settled byproceedings brought in the courts of England. The Russian Federation is a party to the 1958 UnitedNations (New York) Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Aforeign arbitral award obtained in a state which is party to that convention should be recognised andenforced by a Russian court (subject to the qualifications provided for in the convention and compliancewith Russian civil procedure regulations and other procedures and requirements established by Russianlegislation). However, it may be difficult to enforce arbitral awards in the Russian Federation due to therelative inexperience of the Russian courts in international commercial transactions, unofficial politicalresistance to the enforcement of awards against Russian companies in favour of foreign investors andcorruption.

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FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements that relate to, without limitation, the Groupsplans, objectives, goals, strategies, future operations and performance. These forward-looking statementsare characterised by words such as anticipates, estimates, expects, believes, intends, plans,may, will, should and similar expressions. Such forward-looking statements involve known andunknown risks, uncertainties and other important factors that could cause circumstances or the Groupsactual results, performance or achievements to be materially different from any future circumstances,

results, performance or achievements expressed or implied by such statements. Such forward-lookingstatements are inherently based on numerous assumptions regarding, among other things:

the performance of the Russian and world-wide economy;

the effects of Russian and international political events;

the effects of, and changes in, the policy of the Russian government;

availability of funding in domestic and international capital markets;

future prices and demand for the Groups products and demand for the Groups customersproducts;

coal mine reserves potential;

production forecasts of coal;

trends in the coal industry and domestic and international coal market conditions;

risks in coal mining;

future expansion plans and capital expenditures;

the Groups relationship with and other conditions affecting the Groups customers;

competition;

railroad and other transportation performance costs;

availability of specialist and qualified workers; and

acts of war, terrorist acts, geopolitical events, pandemic or other such events, natural and otherdisasters, weather conditions or other catastrophic weather-related damage.

The Group does not make any representation, warranty or prediction that the results anticipated bysuch forward-looking statements will be achieved, and such forward-looking statements represent, in eachcase, only one of many possible scenarios and should not be viewed as the most likely or standard scenario.

Accordingly, prospective purchasers of the Notes should not rely on these forward-looking statements.The important factors that could cause the Groups actual results, performance or achievements to differmaterially from those in these forward-looking statements include, but are not limited to, those discussedinRisk Factors andDescription of the Groups Business. These forward-looking statements speak only as atthe date of this Prospectus. The Group expressly disclaims any obligation or undertaking to disseminateafter the date of this Prospectus any updates or revisions to any forward-looking statements containedherein to reflect any change in the Groups expectation with regard thereto or any change in events,conditions or circumstances on which any such forward-looking statement is based, unless required to doso by applicable law.

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CONTENTS

Page

PRESENTATION OF FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . v

INFORMATION INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii

ENFORCEABILITY OF CIVIL LIABILITIES IN RUSSIA . . . . . . . . . . . . . . . . . . . . . . . . . . ix

FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

OVERVIEW OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

OVERVIEW OF THE TRANSACTION STRUCTURE AND THE SECURITY . . . . . . . . . . . 11

OVERVIEW OF THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

CAPITALISATION AND INDEBTEDNESS OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . 47

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . 48

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

DESCRIPTION OF THE GROUPS BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

MANAGEMENT AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

REGULATION OF THE COAL MINING INDUSTRY IN RUSSIA . . . . . . . . . . . . . . . . . . . . 125

THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134

LOAN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

TERMS AND CONDITIONS OF THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

SUMMARY OF THE PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM . . . . 177

TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

SUBSCRIPTION AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190

TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

CERTAIN ERISA CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201

APPENDIX AMINERAL EXPERTS REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

INDEX TO FINANCIAL STATEMENTS OF THE GROUP . . . . . . . . . . . . . . . . . . . . . . . . . F-1


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OVERVIEW OF THE GROUP

This overview highlights information contained elsewhere in this Prospectus. The following overview shouldbe read in conjunction with, and is qualified in its entirety by reference to, the more detailed information and theFinancial Statements and notes thereto included elsewhere in this Prospectus. Investing in the Notes involvesrisks. Investors should also consider the matters set forth under Risk Factors before deciding to invest in theNotes. Certain statements in this Prospectus include forward-looking statements that also involve risks anduncertainties as described under Forward-Looking Statements.

Overview of the Group

Overview

The Group was one of Russias largest producers of coking coal based on volume of production in2011 (Source: Federal State Unitary Enterprise Central Dispatching Department of Fuel and EnergyComplex (CDU TEK)). The Group conducts its business through the Company and 11 of its keysubsidiaries located in the Kemerovo region of the Russian Federation. Its principal coal-mining andcoal-processing operations consist of three underground mines (the Raspadskaya mine, the MUK-96 mineand the Raspadskaya-Koksovaya mine), one open-pit mine (the Raspadsky open pit) and the Raspadskayacoal concentrate preparation plant. The Group extracted 6.3 million tonnes of raw coal in 2011, 7.2 milliontonnes of raw coal in 2010 and 10.6 million tonnes of raw coal in 2009. It produced 3.8 million tonnes ofcoal concentrate in 2011, 5.2 million tonnes of coal concentrate in 2010 and 7.8 million tonnes of coalconcentrate in 2009.

The Groups management believes that the Groups reserves of coking coal are one of the largest inRussia. SeeIndustry OverviewRussian Coking Coal Market. The Groups reserves and resources of cokingcoal, measured as of 31 December 2011 according to the JORC Code, consisted of coking coal proved andprobable reserves of 1,314 million tonnes, coking coal measured resources of 1,809 million tonnes andcoking coal inferred resources of 262 million tonnes. See Appendix AMineral Experts Report1.5.2Reserves and Resources Statement.

In 2011, the Group had revenue of US$726.1 million, Adjusted EBITDA of US$319.7 million andprofit for the year of US$135.7 million. The Groups Adjusted EBITDA margin and net profit margin were44.0 per cent. and 18.7 per cent., respectively, in that year. In 2010, the Group had revenue ofUS$705.6 million, Adjusted EBITDA of US$337.6 million and profit for the year of US$244.3 million. TheGroups Adjusted EBITDA margin and net profit margin were 47.9 per cent. and 34.6 per cent.,respectively, in 2010.

Recent Developments

First Quarter Operating Results Announcement

On 6 April 2012, the Company announced the following preliminary operating results for the firstquarter of 2012.

The table below sets forth the Groups total raw coal production and sales (of raw coal and coalconcentrate) in the first quarter of 2012, the fourth quarter of 2011 and the first quarter of 2011, as well asthe percentage change between the relevant periods in 2011 and the first quarter of 2012.

% change % changebetween three between three

Three months endedmonths ended months ended

31 March 31 December 31 March 31 March 2012 and 31 March 2012 and2012 2011 2011 31 December 2011 31 March 2011

Total raw coal production (inthousands of tonnes) . . . . . . . . . . . . . . 1,591 1,582 1,775 1% (10)%

Sales (in thousands of tonnes)ConcentrateRussia . . . . . . . . . . . . . . 864 936 935 (8)% (8)%Concentrateexport . . . . . . . . . . . . . . 71 33 0 116%

Total sales of concentrate* . . . . . . . . . . 935 969 935 (4)% 0%Total sales of raw coal** . . . . . . . . . . . 137 151 360 (9)% (62)%Weighted average price of concentratesold (U.S.$ /tonnes) (FCAMezhdurechensk)(1) . . . . . . . . . . . . . . . 128.3 150.0 147.1 (14)% (13)%Average Exchange rate (RUB/U.S.$) . . 30.26 31.23 29.27 (3)% 3%

* Semi-hard coking coal

** Hard coking coal

(1) The prices for the first quarter of 2012 are preliminary and may immaterially differ from the final.

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The overall raw coal production in the first quarter of 2012 totaled 1.59 million tonnes, whichexceeded the production levels of the fourth quarter of 2011 by one per cent., but is lower than the Groupsproduction plan. The key factors affecting production volumes in the reporting period were as follows:

mining and geological conditions (shifts in rock formations) of faces at Raspadskaya mine and atMUK-96 mine in February and at Raspadskaya-Koksovaya mine in March; and

a temporary suspension of works at MUK-96 mine and at Raspadskaya mine during the month ofMarch due to regulatory inspections of underground mining works.

In the first quarter of 2012, as compared to the fourth quarter of 2011, coal concentrate and raw coalsales volumes decreased by four per cent. and nine per cent., respectively. External negative factorsaffecting sales volumes in the reporting period were as follows:

reduced demand for steel products; and

lower orders for coal products from major customers due to reduced production of most Russiancoke and metallurgical producers.

At the same time, the Company announced the following with respect to its ongoing operatingactivities in April 2012:

the Company expects to commence mining a new face #4-9-23 at Raspadskaya mine, with coalreserves exceeding 2.2 million tonnes, in the middle of April;

the Company expects to expand its customer base in Ukraine, with the intention of graduallyincreasing export sales volumes during the second quarter; and

in April, the Company expects to resume its export sales in the Asia-Pacific region through Far Eastports in the amount of 50 thousand tonnes of coal concentrate (for the month).

Other Recent Developments

On 15 November 2011, the Companys board of directors approved a decision to acquire up to78,079,980 (or up to approximately ten per cent.) ordinary registered undocumented shares of theCompany, with the nominal value of 0.004 roubles per share, at the price of 150 roubles per share. Theperiod for submission of applications for the share buyback commenced on 19 December 2011 and expired

on 31 January 2012. The total number of shares of the Company in relation to which applications forbuyback had been properly submitted was 1,008,652,121 shares. According to Federal Law No. 208-FZ of26 December 1995 On Joint Stock Companies, as amended (the JSC Law), it is prohibited for Russiancompanies to acquire more than 10 per cent. of their own shares. In accordance with the JSC Law, on6 February 2012, the board of directors of the Company approved a coefficient of proportional purchase of0.077410217. Therefore, by 2 April 2012, the Company entered into share purchase agreements with allshareholders that properly submitted their applications agreeing to acquire their shares on a pro rata basis.The Groups management currently expects that the Company will complete the buyback of its shares inthe second quarter of 2012.

In the first quarter of 2012, the Group received a loan from Raiffeisenbank in the principal amount ofUS$150 million. The funds received from Raiffeisenbank were used for general corporate purposes.

In March 2012, the Company entered into a non-revolving credit line agreement with OAO Sberbank

of Russia (Sberbank). This agreement allows the Company to borrow up to US$300 million. To date, nofunds have been borrowed thereunder.

Key Strengths

The Groups management believes that the Groups key competitive strengths are as follows:

The Group was one of Russias largest producers of coking coal in 2011

The Group was one of Russias largest producers of coking coal based on volume of production in2011 (Source: CDU TEK). The Groups ability to produce large volumes of coking coal concentrate hasresulted in many large Russian steel companies, such as Evraz (one of the Companys ControllingShareholders), MMK, NLMK and several other Russian metallurgical and coke producing companies

such as Koks, Mechel and Urals Steel, relying on the Group to supply their coke producing plants with alarge proportion of the coal products that are required to operate their businesses. The Groups

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management believes that such companies rely on the Group for coking coal concentrate supply because,in the past (prior to the major accident at the Raspadskaya mine in May 2010), the Group was able toconsistently satisfy its delivery obligations in respect of the requested types of coal concentrate or raw coalfor its major customers. Even after the accident in May 2010, when coal extraction at the Raspadskayamine was completely suspended for several months, the Group only reduced the volume of its deliveries tothe Russian market by approximately 15 per cent. as compared to its contractual obligations. In addition,the Group has extensive experience in selling coal concentrate outside Russia, which is particularlyimportant in the event of a decrease in demand for coal concentrate from Russian metallurgical companiesas, for instance, happened in 2009 due to the impact of the global financial and economic crisis on theRussian steel industry. The Groups status as a leading Russian coking coal concentrate producer hashelped it to build a strong brand name in several markets in Asia and Europe, making it easier to sell itsproducts in these markets.

The Group has a large high-quality coking coal reserves and resources base

According to IMC, as of 31 December 2011, the Group had proved and probable coking coal reservesof 1,314 million tonnes, coking coal measured resources of 1,809 million tonnes and coking coal inferredresources of 262 million tonnes. At the 2011 level of coal extraction, the Groups reserves are of sufficientsize to enable the Group to extract coal for over 90 years. Moreover, the coal reserves and resources foundin the coal field No. 1 and coal field No. 2 of the Raspadskaya-Koksovaya mine, to which Raspadskaya-

Koksovaya, a wholly-owned subsidiary of the Company, holds the licences, are classified under the Russianclassification system as grade K (coking) and grade KO (coking semi-lean). The Groups managementbelieves that these grades of coal would be classified as hard coking coal under the internationalclassification system. As of 31 December 2011, the Groups proved and probable reserves, measuredresources and inferred resources of coals of grades K (coking) and KO (coking semi-lean) were 136 milliontonnes 233 million tonnes and 142 million tonnes, respectively. Coking coals of grades K (coking) andKO (coking semi-lean) are not widely available in Russia and are in high demand both in Russia andabroad due to their lower volatility and high coking ability. Increased volume of extraction of such gradeK (coking) and grade KO (coking semi-lean) coal is expected to help the Group to diversify its productrange and better address the needs of its customers.

The Group benefits from integrated business operations located at a single production complex

The Groups management believes that the Group is one of very few large Russian coal miningcompanies that has integrated business operations located at a single production complex. The Groupsmines and production facilities, which are located not far from the town of Mezhdurechensk in theKemerovo region of Russia, include three underground mines, one open-pit mine and a coal concentratepreparation plant, as well as the Groups own coal and coal concentrate transportation network operatedby the Companys subsidiary TPTU, which connects the Groups production complex to the federal railwaynetwork at the Mezhdurechensk railway station. In addition, the Groups sales and marketing is entirelymanaged by the Companys subsidiary Raspadskiy Ugol, which is located at the Groups head office inMezhdurechensk. Furthermore, the Companys subsidiaries OShPU, which is involved in shaft sinking atthe Groups mines, and Montazhnik Raspadskoy, which supplies the Groups operations with ancillaryequipment, are also located within the single production complex. Thus, the Groups integrated structureenables it to effectively monitor and control the entire value chain from the commencement of shaft-sinking when a new mine construction project is initiated to coal extraction and subsequent coalconcentrate preparation and then to delivery of coal concentrate or raw coal from the Groups facilities tothe federal railway network.

The Groups integrated operations also allow it to significantly reduce the need for outsourcing tothird parties work related to mine development, coal extraction or coal concentrate preparation, whichallows the Group to reduce overall costs of its products. The Raspadskaya coal concentrate preparationplant commenced operations in the fourth quarter of 2005 when the first phase of its development projectwas completed after a two-year construction period. As a result, the Group became able to process coal ofRussian grades Zh (fat), GZh (gas fat) and GZhO (gas fat semi-lean) extracted at the Raspadskaya mine,the MUK-96 mine and the Raspadsky open pit. Phase two of the development project was completed in2008, increasing the plants annual design capacity to 10.5 million tonnes and actual production capacity to15 million tonnes of raw coal processed. Based on the assumption of 7,200 hours of operation per year,which is being achieved by other new coal concentrate preparation plants in Kuzbass, the Groupsmanagement expects that the Raspadskaya coal concentrate preparation plant could achieve a maximum

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annual throughput of 17.3 million tonnes of raw coal. SeeAppendix AMineral Experts Report6.3 PlantPerformance. Following the completion of phase two of the plants development project, the Group alsobecame able to process coal of Russian grades K (coking) and KO (coking semi-lean). The constructionand expansion of operations of the Raspadskaya coal concentrate preparation plant has allowed the Groupto reduce and then eliminate the need for outsourcing of preparation of coal concentrate from raw coalextracted at the Groups mines, which allowed it to better monitor the quality of coal concentrateproduced, provide customers with requested product characteristics and reduce overall costs.

The Group has an experienced management team

The Groups senior managers have extensive experience in the coal mining industry and havesuccessfully transformed the Group into one of the largest coking coal mining companies in Russia. Thecurrent general director (CEO) of Raspadskaya Coal Company, the Groups management company,Gennady I. Kozovoy, assumed such position in April 2003 and had previously served as the Companysgeneral director (CEO) from December 1993 through June 2003. He began working at the Raspadskayamine in 1978. The current chairman of the Companys board of directors, Alexander S. Vagin, has served insuch capacity since December 1993 and has served as first deputy general director of Raspadskaya CoalCompany since March 2004. He began working at the Raspadskaya mine in 1983. Mr. Kozovoy andMr. Vagin are supported by a competent team of senior managers with extensive experience in the coalmining industry. The Groups management believes that extensive experience of the Groups senior

managers in the coal mining industry will help the Group to correctly identify and successfully implementits strategic objectives. Moreover, the Groups management believes that its mining engineers, both at asenior and middle level, have extensive industry experience and considers them to be among the bestmining engineers in Russia.

Strategy

The Groups key strategies include the following:

Complete the reconstruction programme for Raspadskaya mine

In May 2010, the Group experienced a major accident at its Raspadskaya mine. Two methaneexplosions on 8 and 9 May 2010 resulted in the death of 91 miners and rescuers. Coal mining at theRaspadskaya mine was completely suspended for several months. SeeOperationsCoal miningThe

Raspadskaya mineAccident at the Raspadskaya mine in May 2010 for a more detailed description of thisaccident. The reconstruction of the Raspadskaya mine, which is being implemented in line with a series ofreconstruction projects developed by ZAO Giprougol (Giprougol), one of the largest institutions inRussia involved in project development for enterprises in the coal mining industry, consists of four stages.The first stage involved a re-start of coal mining at face 4-9-21 bis (seam 9) with coal reserves ofapproximately 600 thousand tonnes. The Group recommenced coal extraction at face 4-9-21 bis on16 December 2010 and has already completed the extraction of coal at this face. The second stage of thereconstruction project involves re-commencement of operations at three different faces (at coal seams 7-7aand 9) and work has already started in October 2011 at face 4-7-25 with coal reserves of approximately1.4 million tonnes. The Group is currently involved in preparatory work at face 4-9-23, which is expected toallow it to restart work at this face in April 2012. Giprougol is continuing to develop project documentationfor the third and fourth stages of reconstruction of the Raspadskaya mine, which would need to be

approved by Federal Autonomous Enterprise Head Department of the State Examination(Glavgosekspertiza), the state agency responsible for approval of all new construction andreconstruction projects in the coal mining industry. See Risk FactorsRisks Related to the GroupsBusinessThe pace of the reconstruction of the Raspadskaya mine has thus far been slower than initiallyexpected by the Groups management and may continue to fall further behind schedule in the future for adescription of potential regulatory hurdles faced by the Group in connection with the reconstruction of theRaspadskaya mine. In 2011, the Group extracted 1.3 million tonnes of coal at the Raspadskaya mine.

Increase efficient and safe extraction of coking coal reserves

In addition to the reconstruction of the Raspadskaya mine, the Groups management intends toincrease annual extraction of coal at all of the other Groups mines. Under current plans for thedevelopment of the MUK-96 mine, the Raspadskaya-Koksovaya mine and the Raspadsky open pit, the

output of these mines is expected to increase from 1.3 million tonnes, 0.9 million tonnes and 2.7 milliontonnes, respectively, in 2011 to 3.0 million tonnes, 1.7 million tonnes and 3.5 million tonnes in 2015,

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bringing the expected aggregate output of all four mines to 16.7 million tonnes in that year. The increase inthe coal output of these three mines is expected to be achieved principally due to significant capitalexpenditures, which are currently expected to reach 1.3 billion roubles in 2012 and 2.0 billion roubles in2013 for the Raspadskaya-Koksovaya mine, 0.5 billion roubles in 2012 and 0.8 billion roubles in 2013 forthe MUK-96 mine and 0.3 billion roubles in 2012 and 0.8 billion roubles in 2013 for the Raspadsky openpit. There can be no assurance, however, that the Group will be able to achieve such an increase in outputof its mines. These planned coal extraction volumes for 2015 are based upon a number of assumptions andestimates that, while considered reasonable by the Groups management, are inherently subject tosignificant business, operational, economic, competitive and regulatory uncertainties and contingencies,many of which are beyond the Groups control, and upon assumptions in respect of future businessdecisions that are subject to change. No assurance can be given that the strategy will be effective or that theanticipated benefits from the strategy will be realised in the period up to and including 2015, or at all.Accordingly, the Group cannot provide any assurance that these planned coal extraction volumes for 2015will be achieved. The actual output of each mine and the aggregate output of all four mines may varymaterially from the currently planned coal extraction volumes. Important factors that could causedifferences to arise include changing business or other market conditions, general economic conditions inRussia, China or other markets for the Groups products, and the Groups ability to respond to trends inthe coal mining industry. Additional factors could cause actual results to differ materially. Prospectiveinvestors in the Notes are cautioned not to place undue reliance on this information and make their ownprojections about the Groups future operational performance on the basis of their own examination of the

Group and the contents of this Prospectus. See Forward-Looking Statements and Risk Factors.

Moreover, the Group seeks continued expansion of its coal reserves through the selective acquisitionof licences, further geological exploration work and reclassification of its extensive resources into reserves.For example, based on the results of the auction conducted by the Federal Agency for Subsoil Use(Rosnedra) on 21 March 2012, ZAO Razrez Raspadsky, a wholly-owned subsidiary of the Company,obtained a right to develop a Road coal field of the Raspadskoye bituminous coal deposit that hasCategory C1 reserves (under the Russian classification system) of 5.6 million tonnes. SeeAppendix AMineral Experts Report1.5.1 GKZ Categorisation of Reserves and Resources under JORC for the discussionof the Russian classification system and its differences with JORC.

Further strengthen market position in Russia

The Group is already one of the largest suppliers of coking coal in Russia (Source: CDU TEK). TheGroups management intends to further improve the Groups market position by continuing to be knownas a coal concentrate supplier of choice in Russia that is able to consistently satisfy its delivery obligationsto major Russian customers and to benefit from high quality of its coal concentrate products. The Grouphas already signed framework long-term supply contracts with many of its existing customers, includingOAO Evraz United West Siberian Iron and Steel Plant and OAO Evraz Nizhny Tagil Iron and Steel Plant,both of which are subsidiaries of Evraz (one of the Companys Controlling Shareholders), MMK, NLMK,Koks, Mechel and Urals Steel and has recently added significant new customers such as Stroyservice (theowner of Gubakhinsky coke producing plant) and Severstal. The Groups management believes that thispolicy allows the Group to (i) improve demand for the Groups coal concentrate products, (ii) moreaccurately estimate the maximum amount of coal concentrate and raw coal the Group can sell each year inthe domestic market and (iii) maintain its long-term relationships with its largest domestic customers. TheGroup also plans to strengthen its domestic market position by steadily increasing the output of itsRaspadskaya-Koksovaya mine, which produces coal of Russian grades K (coking) and KO (cokingsemi-lean), demand for which in Russia generally exceeds available supply. The Group was effectivelyrequired to sell all of its raw coal extracted at coal field No. 1 at the Raspadskaya-Koksovaya mine to Evrazin 2010 and 2011 and is also required to sell to Evraz coal concentrate produced from 1,080 thousandtonnes of raw coal extracted at the Raspadskaya-Koksovaya mine each year from 2012 to 2019 under theterms of a long-term agreement with Evraz related to the sale of ZAO Koksovaya to the Group in April2010. The Group extracted 419 thousand tonnes and 945 thousand tonnes of coal at the Raspadskaya-Koksovaya mine in 2010 and 2011, respectively. As the output of this mine exceeds 1,080 thousand tonnesin the future, sales of such coal to customers other than Evraz are expected to help the Group to diversifyits product range and better address the needs of such customers.

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Increase the volume of coal concentrate sold outside Russia

Prior to the accident at the Raspadskaya mine in May 2010, the Group was going through a shift in itsexports strategy, with Asian markets becoming increasingly important for the Group. In 2010, Asiancountries became the Groups largest export market for the first time in its history, with the proportion ofthe Asian markets in the Groups coal concentrate sales volume outside Russia reaching 72 per cent. inthat year as compared to just 22 per cent. in 2009. After the accident at the Raspadskaya mine, the Grouptemporarily suspended all exports of its products. In October 2011, the Group resumed limited sales to

Ukraine (accounting for approximately one per cent. of its total sales for 2011).As the Group has an established delivery infrastructure for sales to Asian countries (such as Japan,

Republic of Korea and China) and Ukraine, the Groups management intends to increase the proportionof sales of coal concentrate outside Russia in the Groups total sales of coal concentrate and raw coal asthe reconstruction of the Raspadskaya mine continues. Current plans envision increasing sales outsideRussia to approximately 30 to 35 per cent. of the Groups total sales in the future. Asian markets,particularly Japan and Republic of Korea, are expected to be particularly significant for the Groups futureexport sales. The Chinese market, however, is adversely affected by a large volume of low pricedMongolian supplies of coking coal and is not currently viewed by the Groups management as one of thepriority markets for exports expansion. For additional information on competition in the Chinese cokingcoal market, see Appendix AMineral Experts Report7.2.2 China. The exact geographic location andidentity of customers outside Russia will be determined on the basis of several parameters, including terms

of delivery, price levels, supply volumes, availability of premium payments and discounts, terms of use ofport facilities and capacity of border-crossings and railways.

Maintain financial discipline and focus on profitability

The Groups management intends to continue to maintain the Groups cost leadership in respect ofthe Russian coking coal market in terms of cash costs of coal extraction and coal concentrate preparation.In particular, the Groups management currently expects that as coal extraction at the Raspadskaya mineincreases due to progress in the reconstruction of this mine after the May 2010 accident, the cash cost ofcoal concentrate production per tonne of coal concentrate produced by the Group will decrease in roubleterms. In addition, the Group follows a policy according to which all investment decisions must be alignedwith the goal of maximising returns on the capital employed.

Risk Factors

An investment in the Notes involves risks, including those relating to or arising from the Groupsbusiness and industry, political, social, economic, legislative and legal risks associated with the RussianFederation and risks arising from the nature of the Notes and the markets upon which they are or areexpected to be traded, including the following risks relating to the Groups business and industry:

The pace of the reconstruction of the Raspadskaya mine has thus far been slower than initiallyexpected by the Groups management and may continue to fall further behind schedule in thefuture;

The Group is subject to mining risks;

The Group operates in a cyclical industry and may be adversely affected by any local or global

downturn in the coking coal, coke and steel markets and by the volatility of macroeconomicconditions;

The Groups operations are dependent on having received the required licences, permits andapprovals from governmental authorities. The Groups licences may be suspended, amended orterminated prior to the end of their terms or may not be renewed;

The Group depends on third parties for transportation of its products across significant distances;expenditures on transportation could increase and delays in delivery of the Groups productsharming its reputation;

The Groups management believes that competition in the Russian and the global coking coalindustries is increasing and the Groups business and prospects could be adversely affected if theGroup is not able to compete effectively;

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The Group does not carry all of the types of insurance coverage customary in other more developedcountries for a business of the Groups size and nature, and the Group may be unable to obtainadequate insurance cover;

Increasing labour costs could have an adverse effect on the Groups operations;

The Groups business may be affected by shortages of skilled labour and labour disputes;

Stricter environmental laws and regulations or stricter enforcement of existing environmental laws

and regulations in Russia may have a material adverse effect on the Groups business, results ofoperations, financial condition and prospects;

The Groups operations could be adversely affected if it fails to comply with applicable health andsafety laws, regulations or rules or instructions of the relevant health and safety authorities;

Estimates of the Groups reserves and resources are subject to uncertainties;

The Group has a material weakness in internal control systems;

The Group heavily depends on its senior management and other key personnel;

The Group is, and is expected to continue to be, controlled by the Controlling Shareholders (asdefined in Risk Factors), and their interests or interests of the shareholders of Evraz Group S.A.(Evraz) could conflict with the Groups interests, interests of other Controlling Shareholders

and/or the interests of the Noteholders; The Group must make significant capital expenditures in order to increase its coal extraction and

coal concentrate production levels and improve overall efficiency;

A significant reduction in purchases by the Groups largest customers could adversely affect theGroups revenue;

Weather conditions in the areas where the Groups mines and production facilities and the Groupskey customers are located may disrupt operations;

Insufficient or negative net assets of some companies in the Group could lead to their forcedliquidation;

Fluctuation in the exchange rate of the rouble against the U.S. dollar could adversely affect the

Groups operations;

The Group has engaged in the past and may engage in the future in transactions with related andother parties that may present conflicts

Documents

Prospectus RASP 2017