United Company RUSAL Plc: Continuing Connected Transactions

  United Company RUSAL Plc: Continuing Connected Transactions

Business Wire

HONG KONG -- December 27, 2012

RegulatoryNews:

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)

                      CONTINUING CONNECTED TRANSACTIONS
                            SALE OF RAW MATERIALS

Reference is made to the announcements of the Company dated 8 December 2011
and 7 March 2012 in relation to, among other things, certain sale of raw
materials agreements between members of the Group and the associates of Mr.
Vekselberg, Mr. Blavatnik and SUAL Partners.

SALE OF RAW MATERIALS

Reference is made to the announcements of the Company dated 8 December 2011
and 7 March 2012 in relation to, among other things, certain sale of raw
materials agreements between members of the Group and the associates of Mr.
Vekselberg, Mr. Blavatnik and SUAL Partners.

A. KUMZ Sale of Silicon Agreement

On 26 December 2012, RUSAL TH, a subsidiary of the Company, as seller entered
into a sale of silicon agreement with KUMZ, as buyer, (the “KUMZ Sale of
Silicon Agreement”), pursuant to which RUSAL TH agreed to supply and KUMZ
agreed to purchase silicon of approximately 500 tonnes during the year ending
31 December 2013, at a total consideration of up to USD1.2 million. The term
of the contract is up to 31 December 2013, and will be extended by an addendum
for one year unless any of the parties declares its intention to terminate it.

Under the KUMZ Sale of Silicon Agreement, the consideration is to be 100%
pre-paid and satisfied in cash via wire transfer.

B. Addendum to Green Petroleum Coke Sale Agreement

On 25 December 2012, RUSAL TH, a subsidiary of the Company, as seller entered
into an addendum to the sale of green petroleum coke agreement dated 10
September 2010 with Energoprom Management, as buyer, (the “Addendum to Green
Petroleum Coke Sale Agreement”), pursuant to which RUSAL TH agreed to supply
and Energoprom Management agreed to purchase green petroleum coke of
approximately 120,000 tonnes during the year ending 31 December 2013, at a
total consideration of up to USD16.85 million. The term of the contract is up
to 31 December 2013.

Under the Addendum to Green Petroleum Coke Sale Agreement, the consideration
is to be paid within 25 calendar days upon receipt of pro forma invoice for
shipped products and is to be satisfied in cash via wire transfer.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.25 of the Listing Rules, the continuing connected
transactions contemplated under the KUMZ Sale of Silicon Agreement and the
Addendum to Green Petroleum Coke Sale Agreement will be aggregated, as they
were entered into by the Group with the associates of the same group of
connected persons who are parties connected or otherwise associated with one
another, and the subject matters of each of the agreements relate to the sale
of raw materials by members of the Group.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Based on the terms of the KUMZ Sale of Silicon Agreement and the Addendum to
Green Petroleum Coke Sale Agreement, the annual aggregate transaction amount
that is payable by the associates of SUAL Partners, Mr. Vekselberg and Mr.
Blavatnik to the Group is approximately USD18.05 million for the year ending
31 December 2013.

The annual aggregate transaction amounts were estimated by the Directors based
on the amount of the raw materials to be supplied and the relevant contract
price.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the transactions contemplated under the KUMZ Sale
of Silicon Agreement are for the benefit of the Company as the silicon
supplied under these agreements was the current excess raw materials unused by
the Group, and that the silicon sold under the relevant agreements were
required under Regulation of Federal Antimonopoly Service of the Russian
Federation (FAS) to meet the demand of domestic customers.

The Directors consider that the transactions contemplated under the Addendum
to Green Petroleum Coke Sale Agreement are for the benefit of the Company. The
green petroleum coke to be sold by the Company under the Green Petroleum Coke
Sale Agreement will be used by Energoprom Management to produce the calcined
oil coke, which will be sold by Energoprom Management to the Group. Therefore,
the entry into the Green Petroleum Coke Sale Agreement would enable the Group
to (i) obtain the raw materials of the necessary quality for production and
(ii) maintain the costs of calcined oil coke to be purchased below the
prevailing market rate.

The terms of the KUMZ Sale of Silicon Agreement and the Addendum to Green
Petroleum Coke Sale Agreement have been negotiated on arm’s length basis
between the Group and the associates of SUAL Partners, Mr. Vekselberg and Mr.
Blavatnik, and are on normal commercial terms. The consideration payable under
these agreements has been determined with reference to the market price and on
terms no less favourable than those prevailing in the Russian market for the
silicon of the same type and quality as those offered by the Group to
independent third parties.

The Directors (including the independent non-executive Directors) consider
that the transactions contemplated under the KUMZ Sale of Silicon Agreement
and the Addendum to Green Petroleum Coke Sale Agreement were entered into on
normal commercial terms which are fair and reasonable and the transactions
contemplated are in the ordinary and usual course of business of the Group and
in the interests of the Company and its shareholders as a whole.

None of the Directors have a material interest in the transactions
contemplated by the KUMZ Sale of Silicon Agreement and the Addendum to Green
Petroleum Coke Sale Agreement, save for Mr. Blavatnik, being a non-executive
Director who is indirectly interested in more than 30% in SUAL Partners, is
indirectly interested in KUMZ and Energoprom Management. Accordingly, Mr.
Blavatnik did not vote on the Board resolutions to approve the KUMZ Sale of
Silicon Agreement and the Addendum to Green Petroleum Coke Sale Agreement.

LISTING RULES IMPLICATIONS

Each of Mr. Vekselberg and Mr. Blavatnik indirectly holds more than 30% of the
issued share capital of Energoprom Management. SUAL Partners, being a
substantial shareholder of the Company, has a controlling interest of more
than 30% in KUMZ. Each of KUMZ and Energoprom Management is a connected person
of the Company under the Listing Rules.

Accordingly, the transactions contemplated under the KUMZ Sale of Silicon
Agreement and the Addendum to Green Petroleum Coke Sale Agreement constitute
continuing connected transactions of the Company.

The annual aggregate transaction amount of the continuing connected
transactions under the KUMZ Sale of Silicon Agreement and the Addendum to
Green Petroleum Coke Sale Agreement for the financial year ending 31 December
2013 is more than 0.1% but less than 5% under the applicable percentage
ratios.

Accordingly, pursuant to Rule 14A.34 of the Listing Rules, the transactions
contemplated under these agreements for the year ending 31 December 2013 are
subject to the reporting and announcement requirements set out in Rules 14A.45
to 14A.47, the annual review requirements set out in Rules 14A.37 to 14A.40
and the requirements set out in Rules 14A.35(1) and 14A.35(2) of the Listing
Rules. These transactions are exempt from the independent shareholders’
approval requirements under Chapter 14A of the Listing Rules.

Details of the KUMZ Sale of Silicon Agreement and the Addendum to Green
Petroleum Coke Sale Agreement will be included in the next annual report and
accounts of the Company in accordance with Rule 14A.46 of the Listing Rules
where appropriate.

PRINCIPAL BUSINESS ACTIVITIES

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 5 continents, the
operations and offices of the Company employ over 72,000 people.

KUMZ is principally engaged in metallurgy.

Energoprom Management is principally engaged in manufacturing high-technology
electrode and cathode products, the main consumers of which are producers of
steel, aluminium, silicon and ferrous alloys.

DEFINITIONS

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

“associate”                 has the same meaning ascribed thereto under the
                             Listing Rules.
“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.
“connected person”           has the same meaning ascribed thereto under the
                             Listing Rules.
“continuing connected        has the same meaning ascribed thereto under the
transaction”                 Listing Rules.
“Director(s)”                the director(s) of the Company.
                             Energoprom Management CJSC or ZAO Energoprom
“Energoprom Management”      Management, a company incorporated under the laws
                             of the Russian Federation.
“Group”                      the Company and its subsidiaries.
                             Kamensk-Uralsky Metallurgical Works Joint-Stock
“KUMZ”                       Company, a company incorporated under the laws of
                             the Russian Federation.
“Listing Rules”              the Rules Governing the Listing of Securities On
                             The Stock Exchange Of Hong Kong Limited.
“Mr. Blavatnik”              Mr. Len Blavatnik, a non-executive Director.
                             Mr. Victor Vekselberg, whose resignation as a
“Mr. Vekselberg”             non-executive Director took effect on 16 March
                             2012.
“percentage ratios”          the percentage ratios under Rule 14.07 of the
                             Listing Rules.
“Stock Exchange”             The Stock Exchange of Hong Kong Limited.
                             SUAL Partners Limited, a company incorporated
“SUAL Partners”              under the laws of Bahamas, which is a substantial
                             shareholder of the Company.
“substantial shareholder”    has the same meaning ascribed thereto under the
                             Listing Rules.
“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

28 December 2012

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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