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United Company RUSAL Plc: Continuing Connected Transactions Purchase of Railcars



  United Company RUSAL Plc: Continuing Connected Transactions Purchase of
  Railcars

Business Wire

HONG KONG -- December 27, 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)

            CONTINUING CONNECTED TRANSACTIONS PURCHASE OF RAILCARS

The Company is pleased to announce that on 27 December 2012, RUSAL Trans, as
the buyer, and Ruzhimmash, as the supplier, entered into the Railcars Supply
Agreement.

THE RAILCARS SUPPLY AGREEMENT

The Company is pleased to announce that on 27 December 2012, RUSAL Trans, as
the buyer, and Ruzhimmash, as the supplier, entered into a railcars supply
agreement (the “Railcars Supply Agreement”) pursuant to which RUSAL Trans
agreed to buy and Ruzhimmash agreed to develop, manufacture and sell
approximately 100 railcars in 2013 and around 200 railcars in 2014, for a
total consideration of up to approximately USD12.7 million for the year ending
31 December 2013 and approximately USD15.2 million for the year ending 31
December 2014. RUSAL Trans has the right to exercise an option to order over
300 additional series-built railcars should the Company have the need
therefor, at a discount of RUB 63,559 per 1 series-built railcar and should
such purchase be reasonable and economically feasible for the Company at that
time.

The Railcars Supply Agreement is expected to be terminated on 31 December 2014
but can be extended for one year.

Under the Railcars Supply Agreement, the consideration is to be satisfied in
cash via wire transfer as follows:

Payment for development and manufacturing

40%       To be paid within 15 banking days after effective date of agreement
           
45%       To be paid at least 10 days prior to the commencement of preliminary
          and certification testing of the trial railcar
           
          To be paid within 10 working days after three months of operation of
          the railcar under a normal load from the railcar delivery date. If
          there are deficiencies that would require elimination or additional
Balance   improvements are identified during that period, the final payment
          date will be postponed proportionately to the time spent of
          eliminating deficiencies identified during the operation of the
          railcar
           

Payment for supply of railcars:

  * 70% (prepayment) of the agreed cost of monthly railcar batch will be
    effected 15 days prior to the beginning of the month of the approved batch
    delivery;
  * the final settlement will be made against the invoice within 7 banking
    days from the date of signing the railcar acceptance

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Based on the terms of the Railcars Supply Agreement, the annual aggregate
transaction amount that is payable by members of the Group to Ruzhimmash for
the financial years ending 31 December 2013 and 31 December 2014 is estimated
to be up to approximately USD12.7 million and USD 15.2 million respectively.

This annual aggregate transaction amount is estimated by Directors based on
the amount of railcars to be supplied and their contract price.

REASONS FOR AND BENEFITS OF THE TRANSACTION

The transactions contemplated under the Railcars Supply Agreement are entered
into for the purposes of acquiring specialized alumina and aluminium
transportation railcars. The Company considers that the transactions
contemplated under the Railcars Supply Agreement are for the benefit of the
Company, as Ruzhimmash offered the development, manufacturing and supply of
railcars to the Group at costs more favourable than the prevailing market.

The consideration payable under the Railcars Supply Agreement has been
determined with reference to the market price and on terms no less favourable
than those prevailing in the Russian market for railcars respectively of the
same type and quality as those offered by Ruzhimmash to independent third
parties.

The Directors (including the independent non-executive Directors) consider
that the Railcars Supply Agreement has been entered into on normal commercial
terms which are fair and reasonable and the transactions contemplated under
the Railcars Supply Agreement 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 has a material interest in the transactions contemplated
by the Railcars Supply Agreement save for Mr. Oleg Deripaska, the chief
executive officer of the Company and an executive Director, who is
beneficially interested in more than 50% of the issued share capital of En+.
Accordingly, Mr. Oleg Deripaska did not vote at the board meeting at which the
Board resolutions for approving the Railcars Supply Agreement was considered.

LISTING RULES IMPLICATIONS

Ruzhimmash is held by Basic Element as to more than 30% of the issued share
capital. Basic Element is in turn held by Mr. Oleg Deripaska (the chief
executive officer of the Company and an executive Director) as to more than
50% of the issued share capital. Accordingly, Ruzhimmash is therefore an
associate of Mr. Oleg Deripaska and is thus a connected person of the Company
under the Listing Rules and the transactions contemplated under the Railcars
Supply Agreement constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount for each of the financial
year ending 31 December 2013 and 31 December 2014 under the Railcars Supply
Agreement is expected to be 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 that agreement are only
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 Railcars Supply 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 OF THE COMPANY AND RUZHIMMASH

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.

Ruzhimmash is principally engaged in the development, production and sales of
freight rolling stock for railway transport and its repair.

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
                         
“Basic Element”         Basic Element Limited, a company incorporated in
                        Jersey
                         
“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
                         
“Group”                 the Company and its subsidiaries
                         
“Listing Rules”         The Rules Governing the Listing of Securities on the
                        Stock Exchange
                         
“percentage ratios”     the percentage ratios under Rule 14.07 of the Listing
                        Rules
                         
“RUSAL Trans”           RUSAL Trans LLC, an indirect wholly-owned subsidiary
                        of the Company
                         
“Ruzhimmash”            OJSC Ruzhimmash, a company incorporated under the laws
                        of the Russian Federation
                         
“Stock Exchange”        The Stock Exchange of Hong Kong Limited
                         
“USD”                   United States dollars, the lawful currency of the
                        United States
                         

  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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