United Company RUSAL Plc: Major Transaction Settlement with Interros in Relation to Norilsk Nickel

  United Company RUSAL Plc: Major Transaction Settlement with Interros in
  Relation to Norilsk Nickel

Business Wire

HONG KONG -- December 04, 2012

Regulatory News:

United Company RUSAL Plc (Paris:RUSAL) (Paris:RUAL)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong
Limited take no responsibility for the contents of this announcement, make no
representation as to its accuracy or completeness and expressly disclaim any
liability whatsoever for any loss howsoever arising from or in reliance upon
the whole or any part of the contents of this announcement.

                           UNITED COMPANY RUSAL PLC
        (Incorporated under the laws of Jersey with limited liability)
                              (Stock Code: 486)

                              MAJOR TRANSACTION
            SETTLEMENT WITH INTERROS IN RELATION TO NORILSK NICKEL

The Board announces that on 3 December 2012 (Moscow time), it received an
offer from Interros in relation to Norilsk Nickel to enter into an agreement
to improve the existing corporate governance and transparency of the Norilsk
Nickel group, to maximize profitability and shareholders value and to settle
the disagreements of the Company and Interros in relation to the Norilsk
Nickel group (the "Interros Offer”).

The Board also announces that on 3 December 2012 (Moscow time) it urgently
considered the Interros Offer and resolved to accept the Interros Offer and
instructed the management of the Company to enter into the agreement between
the Company, Interros, Millhouse and the respective beneficial owners of
Interros and Millhouse, namely Mr. Potanin and Mr. Abramovich contemplated by
the Interros Offer (the "Agreement”) and a deed of Mr. Oleg Deripaska.

The Option under the Agreement constitutes a major transaction of the Company
subject to the reporting, announcement and shareholders´ approval requirements
under Chapter 14 of the Listing Rules.

The Company will seek a written shareholders´ approval from the Allied
Shareholders to approve the Option and the transactions contemplated
thereunder pursuant to Rule 14.44 of the Listing Rules, subject to acceptance
by the Stock Exchange that the Company may rely on such written shareholders´
approval in lieu of holding a general meeting. A circular containing, among
other things, further information in respect thereof is expected to be
despatched to the Shareholders in accordance with Chapter 14 of the Listing
Rules on or before 15 business days after this announcement.

Shareholders and potential investors should note that the transactions
contemplated by the Agreement may require the satisfaction of certain
conditions and therefore may or may not proceed. Shareholders and potential
investors should exercise extreme caution when dealing in the securities of
the Company.

INTRODUCTION

Reference is made to the interim report of the Company for the half year ended
30 June 2010 and the announcement of the Company dated 11 August 2010 in
relation to the filing of a request for arbitration to the London Court of
International Arbitration for the commencement of arbitration against
Interros. The request for arbitration relates to a dispute concerning a
cooperation agreement entered into by the Company and Interros on 25 November
2008 in respect of Norilsk Nickel, the world’s largest nickel and palladium
producer and one of the leading producers of platinum and copper. Norilsk
Nickel is a significant strategic investment of the Company.

Norilsk Nickel is currently held as to approximately 28% by Interros and
25.13% by the Group. In addition, approximately 17% shares of Norilsk Nickel
are quasi-treasury shares as they are held by subsidiaries of Norilsk Nickel.

The Board announces that on 3 December 2012 (Moscow time) it approved the
entering into of the Agreement.

MAJOR TERMS OF THE AGREEMENT

The summary of the principal terms of the Agreement is set out below:-

Parties

(1) the Company

(2) Interros

(3) Millhouse

(4) Mr. Potanin (as a beneficial owner of Interros)

(5) Mr. Abramovich (as a beneficial owner of Millhouse)

To the best of the Directors’ knowledge, information and belief having made
all reasonable enquiries, each of Interros and Millhouse, and their respective
ultimate beneficial owners, namely Mr. Potanin and Mr. Abramovich, are third
parties independent of the Company and its connected persons (as defined in
the Listing Rules).

Acquisition and Redemption of Quasi-treasury Shares in Norilsk Nickel

In accordance with the terms of the Agreement it is the intention of the
Parties that Millhouse shall acquire quasi-treasury shares of Norilsk Nickel
representing approximately 7.3% of Norilsk Nickel which are currently held by
subsidiaries of Norilsk Nickel and all the remaining quasi-treasury shares in
Norilsk Nickel shall be redeemed by Norilsk Nickel.

Right of each Norilsk Nickel Shareholder

In accordance with the terms of the Agreement it is the intention of the
Parties that in the event that any of Interros, Millhouse or the Company
commits certain breaches as set out in the Agreement, the non-defaulting
Norilsk Nickel Shareholders may at their discretion (in an amount pro-rated
according to their respective shareholdings in Norilsk Nickel) (i) buy-out the
7.5% shares in Norilsk Nickel of the defaulting party in cash at a 25%
discount to the average weighted price of the shares at the Moscow
stock-exchange for 30 days prior to the buy-out date; or (ii) purchase (in an
amount pro-rated according to their respective shareholdings in Norilsk
Nickel) 1.875% shares in Norilsk Nickel of the defaulting party in cash at a
nominal consideration of USD1.

Management of Norilsk Nickel

In accordance with the terms of the Agreement it is the intention of the
Parties that the board of directors of Norilsk Nickel shall be composed of
thirteen (13) members, four (4) nominated by the Company, four (4) by
Interros, three (3) by Millhouse, and two (2) independent directors with each
of such independent directors being nominated by each of the Company and
Interros. The Independent Chairman shall be nominated jointly by the Company,
Interros and Millhouse. Also, Mr. Potanin shall be the General Director of
Norilsk Nickel and shall be responsible for the management of the Norilsk
Nickel group. The role of the General Director is vested in Mr Potanin, and Mr
Potanin in his capacity as a Managing Partner will assume certain obligations
seeking, among others, to address the proper governance of Norilsk Nickel.

In accordance with the terms of the Agreement it is the intention of the
Parties that the Parties shall procure that the approval of reserved matters
as set forth in the Agreement shall require the consent of each Party
including (a) dividend policy; (b) amendment to the charter documents of
Norilsk Nickel; (c) related party transactions; (d) material transactions; (e)
transactions outside the ordinary course of business: (f) acquisitions and
disposals outside of Russia; (g) securities transactions; (h) marketing
strategy; (i) profit distributions other than dividends; (j) dividends not in
compliance with the dividend policy; and (k) replacement of the General
Director of Norilsk Nickel by a management company.

Dividend Policy

The Agreement provides for certain measures ensuring stability of dividends
paid by Norilsk Nickel in relation to the years 2012, 2013, and 2014
respectively.

Release and Stay

The ongoing disputes and claims with regard to the Norilsk Nickel group and
transactions with shares of Norilsk Nickel including the judicial, arbitration
and other proceedings between the Company and the Interros group will be
stayed from the date of the Agreement and, subject to compliance with the
terms and conditions provided in the Agreement, such disputes and claims shall
be settled in full.

Lock-up and Right of First Refusal

Pursuant to the Agreement, it is intended that each of the Company and
Interros shall not sell or otherwise dispose of the shares it holds in Norilsk
Nickel for a period of five (5) years and Millhouse shall not sell or
otherwise dispose of the shares it holds in Norilsk Nickel for a period of
three (3) years after the date of the Agreement subject to certain exceptions.
Moreover, it is intended that each of the Company, Interros and Millhouse
shall be entitled to the right of first refusal in respect of any contemplated
sale of Norilsk Nickel shares by any other party to the Agreement.

Mr. Potanin and Mr. Abramovich

Each of Mr. Potanin and Mr. Abramovich shall undertake to procure the
performance of the Agreement by Interros and Millhouse respectively.

Conditions Precedent

The transactions contemplated by the Agreement may require the satisfaction of
certain conditions including, among other things, approval from the Company´s
shareholders as required under the Listing Rules and all applicable regulatory
and contractual approvals.

REASONS FOR AND BENEFITS OF THE AGREEMENT

The reasons for and benefits of entering into the Agreement are to improve the
existing corporate governance and transparency of the Norilsk Nickel group, to
maximize profitability and shareholders value and to settle the disagreements
of the Company and Interros in relation to the Norilsk Nickel group.

The Directors, including the independent non-executive Directors, are of the
view that the Agreement is, having regard to the particular facts and
circumstances, on normal commercial terms which are fair and reasonable and
are in the best interests of the Company and the Shareholders as a whole.

It is intended that Mr. Deripaska also enters into a separate deed to procure
the Company’s performance under the Agreement.

LISTING RULES IMPLICATIONS

The right granted by the Company, in the event of the Company´s breach of the
Agreement, to a non-defaulting Norilsk Nickel Shareholder to buy-out the
Company´s 7.5% shares at a 25% discount or buy-out 1.875% shares at a nominal
consideration of USD1 as described above constitutes a transaction of the
Company under Chapter 14 of the Listing Rules, namely the grant of an "option”
under Rule 14.74 of the Listing Rules (the "Option”).

Since one of the applicable percentage ratios for the Option is more than 25%
but all the applicable percentage ratios are less than 75%, the Option
constitutes a major transaction of the Company under Chapter 14 of the Listing
Rules subject to the reporting, announcement and shareholders’ approval
requirements under Chapter 14 of the Listing Rules.

As at the date of this announcement, none of the Shareholders has a material
interest in the Option and the transactions contemplated thereunder, and
therefore no Shareholder would be required to abstain from voting if the
Company is required to convene a general meeting.

As at the date of this announcement, En+, Glencore, SUAL and Onexim (together,
the "Allied Shareholders”) control an aggregate of approximately 89.70%* of
the issued share capital of the Company. The Allied Shareholders are parties
to a shareholders´ agreement dated 22 January 2012 relating to the Company.

The Company will seek a written shareholders´ approval from the Allied
Shareholders to approve the Option and the transactions contemplated
thereunder pursuant to Rule 14.44 of the Listing Rules, subject to acceptance
by the Stock Exchange that the Company may rely on such written shareholders´
approval in lieu of holding a general meeting. The Company will make an
application to the Stock Exchange pursuant to Rule 14.45 of the Listing Rules
accordingly.

Information in relation to the shares of the Company controlled by each of the
Allied Shareholders as at the date of this announcement is set out below:

Allied Shareholders  Percentage of issued shared
                      capital of the Company*
                      
En+                   48.13%
Glencore              8.75%
SUAL                  15.80%
Onexim                17.02%
                      
                      
Total                 89.70%
                      
                      

* All percentage figures are approximate and rounded up

A circular containing, among other things, further information in respect
thereof is expected to be despatched to the Shareholders in accordance with
the Listing Rules within 15 business days after the date of this announcement.

INFORMATION OF THE COMPANY, INTERROS, MILLHOUSE, MR. POTANIN, MR. ABRAMOVICH
AND NORILSK NICKEL

The Company is principally engaged in the production of aluminium and alumina.
The Company’s assets include bauxite and nepheline ore mines, alumina
refineries, aluminium smelters, casthouse business for alloys production,
aluminium foil mills and production of aluminium packaging materials as well
as power-generating assets. Spread across 19 countries in five continents, the
operations and offices of the Company employ more than 72,000 people.

To the best of the Directors’ knowledge, information and belief: (i) Interros
is a private investment company. The key areas of business are metals and
mining, mass media, real estate and tourism and transport and logistics. Mr.
Potanin is the beneficial owner of Interros; and (ii) Millhouse is principally
engaged in investment activities. Mr Abramovich is the beneficial owner of
Millhouse.

Norilsk Nickel is the world’s largest producer of nickel and palladium and one
of the leading producers of platinum and copper. It also produces various
by-products, such as cobalt, rhodium, silver, gold, iridium, ruthenium,
selenium, tellurium and sulfur. The Norilsk Nickel group is involved in
prospecting, exploration, extraction, refining and metallurgical processing of
minerals, as well as in production, marketing and sale of base and precious
metals. Norilsk Nickel´s production facilities are located on three continents
and in five countries namely Russia, Australia, Botswana, Finland and South
Africa. Based on the annual report of Norilsk Nickel: (i) the net asset value
of Norisk Nickel as of 31 December 2011 is USD18,912 million; and (ii) for the
latest two calendar years, the net profits of Norisk Nickel were as follows:

                                     Before taxation   After taxation
                                                         
For the year ended 31 December 2010   USD6,782 million   USD3,089 million
For the year ended 31 December 2011   USD5,646 million   USD3,626 million
                                                         

Shareholders and potential investors should note that the transactions
contemplated by the Agreement may require the satisfaction of certain
conditions and therefore may or may not proceed. Shareholders and potential
investors should exercise extreme caution when dealing in the securities of
the Company.

DEFINITIONS

In this announcement, the following expressions have the following meanings,
unless the context otherwise requires:

"Board”             the board of Directors.
                      United Company RUSAL Plc, a limited liability company
"Company”             incorporated in Jersey, the shares of which are listed
                      on the main board of the Stock Exchange.
"Director(s)”         the director(s) of the Company.
"En+”                 En+ Group Limited
"Glencore”            Glencore International AG.
"Group”               the Company and its subsidiaries.
"Interros”            Interros International Investments Limited.
"Listing Rules”       The Rules Governing the Listing of Securities on the
                      Stock Exchange.
"Millhouse”           Millhouse Capital UK Ltd.
"Mr. Abramovich”      Mr. Roman Abramovich, beneficial owner of Millhouse.
                      Mr. Oleg Deripaska, an executive Director and the chief
"Mr. Deripaska”       executive officer of the Company who also controls En+,
                      the controlling shareholder (as defined in the Listing
                      Rules) of the Company.
"Mr. Potanin”         Mr. Vladimir Potanin, beneficial owner of Interros.
"Norilsk Nickel”      Open Joint Stock Company Mining and Metallurgical
                      Company Norilsk Nickel.
"Norilsk Nickel       the Company, Interros and Millhouse.
Shareholders”
"Onexim”              Onexim Holdings Limited.
                      the Company, Interros, Millhouse, and the respective
"Parties”             beneficial owners of Interros and Millhouse namely Mr.
                      Potanin and Mr. Abramovich.
"Shareholders”        the shareholders of the Company
"Stock Exchange”      The Stock Exchange of Hong Kong Limited.
"SUAL”                SUAL Partners Limited.
"USD”                 United States dollars, the lawful currency of the United
                      States of America.
                      

                                         By Order of the Board of Directors of
                                                      United Company RUSAL Plc
                                                            Vladislav Soloviev
                                                                      Director

4 December 2012 (Hong Kong time)

As at the date of this announcement, the executive Directors are Mr. Oleg
Deripaska, Ms. Vera Kurochkina, Mr. Maxim Sokov and Mr. Vladislav Soloviev,
the non-executive Directors are Mr. Dmitry Afanasiev, Mr. Len Blavatnik, Mr.
Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan Moldazhanova, Mr. Christophe
Charlier, Mr. Artem Volynets, Mr. Dmitry Yudin, Mr. Vadim Geraskin, and the
independent non-executive Directors are Mr. Barry Cheung Chun-yuen, Dr. Peter
Nigel Kenny, Mr. Philip Lader, Ms. Elsie Leung Oi-sie and Mr. Matthias Warnig
(Chairman).

All announcements and press releases published by the Company are available on
its website under the links http://www.rusal.ru/en/investors/info.aspx and
http://www.rusal.ru/en/press-center/ press-releases.aspx, respectively.

Contact:

United Company RUSAL Plc
 
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