Vallourec covenants

All,

The call is about to start.

First impressions:

- Operationally positive. EBITDA is better than model at E102m for Q2 bringing leverage under 7.0x.

- Commentary in line with expectations.

- Closure of the Power Gen business. This is not entirely unexpected, but it has its implications on the covenant calculation.

Covenant:

- The company has published a first covenant calculation, laying bare that the math is less forgiving than we thought. Leaving our model unchanged for the new numbers, Vallourec would be close to breaching those covenants by Year end.

- If the closure of the Power Gen business causes a write-off, the company likely breaches those covenants.

Tomas is on the call.

Wolfgang