Companies controlled by Mechel OAO make their decisions based on economic utility principles and have never been, nor will they be influenced by geopolitical situations.
We must stress that Mechel Târgovişte currently honors all the orders placed by Romanian entities operating in the defense industry and is open to doing so in the future, regardless of the country for which such products are intended.
The information that the Block and Bar Division (F.B.B.) has "suddenly cut its output" is not true to fact. The output of the division has not changed. The load of its capacity only depends on market factors, which currently reflect the shrinking demand in Eastern Europe in general, and in Romania in particular. However, in spite of all this, Mechel is currently working on a program for the rehabilitation of the FBB section, which provides the optimization of its technologies and the increase of its profitability.
Concerning the sale of two pieces of equipment SXP16 and SXP26 of the FBB section of Mechel Târgovişte, this requires the following clarifications:
The deal was made in full compliance with the legislation in force.
The deal was made taking into account the principle of the market price. The price that the Mechel Târgovişte plant has received in exchange for the piece of equipment was determined by an evaluator which was appointed following a call for tenders. The value of the equipment was determined by an independent evaluator, member of the National Association of Romanian Evaluators (ANEVAR), in compliance with the International Valuation Standards (IVS) and with the guidelines of ANEVAR, representing the market price, which is valid for the sale of this good on the open market.
The information concerning the sale of the two pieces of equipment was made public prior to the transaction. All the interested parties had the
