Fitch Ratings–London/Moscow–8 February 2005: Fitch Ratings, the international rating agency has today affirmed Russia-based Magnitogorsk Metal and Steel Works (“MMK”) Senior Unsecured foreign currency rating of ‘BB-‘(BB minus).
   The Outlook for the rating remains Stable. This follows an assessment of additional information received from the company’s management, which satisfied the uncertainties outlined in the agency’s comment issued on 23 December 2004.
   In particular, the agency understands that MMK’s management is neither directly nor indirectly related to the investor base represented by UFG’s 100%-owned entities UFGIS Trading Ltd and UFGIS Structured Holding Ltd, respectively. In addition, the transfer of ownership of Mechel’s and government stakes in MMK of 15% and 18%, respectively had no impact on the net debt position of the company. The legal environment in Russia provides UFG, with its 33% stake, an ability to block the decision-making process at MMK in some circumstances. However, Fitch understands that such events would be limited to share issues or IPOs while in practice the new shareholders have stated their support for management’s strategy. 
  Fitch understands that upon completion of MMK’s privatisation, which was effective with the sale of the remaining government stake on 22 December 2004, the shareholding structure will be reorganised, thus allowing for greater transparency.

The agency will closely monitor progress going forward.Contacts: Sonya Dilova, London, Tel: +44 20 7417 3485,
Larissa Malycheva Tel: +44 20 7417 4207
and Nikolai Lukashevich, Moscow, Tel: +7 095 956 9901
Media Relations: Alex Clelland, London, Tel: +44 207 7862 4084