Nippon Steel & Sumitomo Metal : Conversion of Mandatory Convertible Bonds of Vallourec (France), subscribed by NSSMC, to Ordinary Shares

Jun. 21, 2016

Nippon Steel & Sumitomo Metal Corporation

Conversion of Mandatory Convertible Bonds of Vallourec (France),
subscribed by NSSMC, to Ordinary Shares

On February 1, 2016, Nippon Steel & Sumitomo Metal Corporation (hereinafter 'NSSMC') announced its plan of support for the capital increase of Vallourec S.A. ('Vallourec') through NSSMC's subscription to a rights issue by Vallourec to be equally subscribed by all shareholders and to the issuance of mandatory convertible bonds, as part of the expansion of NSSMC's strategic partnership with Vallourec. The issuance of the new shares under the rights issue and of the mandatory convertible bonds was completed in May 2016. Upon approval by antitrust authorities in Brazil, the mandatory convertible bonds were converted to ordinary shares on June 20, 2016. As a result, NSSMC's shareholding ratio in Vallourec has risen to 15%, combined with the pre-existing shareholding.

NSSMC has the right to present a candidate for a Supervisory Board member of Vallourec, who will be proposed for approval at Vallourec's next shareholders meeting. Upon the election of NSSMC's representative, NSSMC plans to account for its investment in Vallourec using the equity method of accounting, starting from fiscal year 2017.

Company Name: Vallourec S.A.
Location: France, Paris
Shareholders: Banque Publique d'Investissement (Bpifrance) 15%, NSSMC 15%, Group Employees 3.0% or less, Caisse des Dépôts et Consignations (CDC) 1.7%,
Treasury Shares 0.4%, Others 65% or less (as of June 20, 2016）
Establishment: 1899
Business: Manufacturing and sales of seamless pipes
Share Capital: EUR 271 million
Capacity: 2.9 million tons p.a. (in 2015)
Employee: Over 20,000 (in 2015)

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