United Company RUSAL Plc: Continuing Connected Transactions
United Company RUSAL Plc: Continuing Connected Transactions
Business Wire
HONG KONG -- December 27, 2012
Regulatory News:
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 (Paris:RUSAL) (Paris:RUAL)
(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 12 September 2011,
20 December 2011 and 13 April 2012 in relation to certain continuing connected
transactions regarding the supply of raw materials by members of the Group to
the associates of Mr. Deripaska.
The Company announces that certain members of the Group (namely Open Joint
Stock Company “RUSAL Bratsk”, Open Joint Stock Company “RUSAL Sayanogorsk”,
Open Joint Stock Company “RUSAL Krasnoyarsk”, RUSAL TH) as sellers, have
entered/will enter into the 2013 Raw Materials Supply Contracts with the
associates of Mr. Deripaska/En+.
Reference is made to the announcements of the Company dated 12 September 2011,
20 December 2011 and 13 April 2012 in relation to certain continuing connected
transactions regarding the supply of raw materials by members of the Group to
the associates of Mr. Deripaska.
2013 RAW MATERIALS SUPPLY CONTRACTS
The Company announces that certain members of the Group (namely Open Joint
Stock Company “RUSAL Bratsk”, Open Joint Stock Company “RUSAL Sayanogorsk”,
Open Joint Stock Company “RUSAL Krasnoyarsk”, RUSAL TH,) as sellers, have
entered/will enter into the following raw materials supply contracts with
particulars set out below (the “2013 Raw Materials Supply Contracts”):
Estimated
consideration Estimated
payable for delivery Duration
Expected date Buyer (an associate Raw the year volume for and Payment
of contract of Mr. Deripaska/En+) materials to ending 31 the year extension terms
be supplied December 2013 ending 31 clause
excluding VAT December
(USD, 2013
million)
Commodities
and Upon
Closed Joint Stock materials Up to 31 delivery
On 1 January Company (gasoline, 0.03 34.5 tonnes January within 10
2013 “Irkutskenergoremont” diesel fuel 2013. No business
oil, engine extension. days
oil,
lubricants)
Commodities
and Upon
materials Up to 31 delivery
On 1 January “KraMZ-Auto” Limited (gasoline, 0.53 690 tonnes January within 10
2013 Liability Company diesel fuel 2013. No business
oil, engine extension. days
oil,
lubricants)
Upon
Up to 31 delivery
On 1 January “KraMZ-Auto” Limited Fuels and 1,155.88 January within 10
2013 Liability Company lubricants 2.32 tonnes 2013. No business
extension. days from
the date of
invoice
189 tonnes Upon
Lumber, (fuels and delivery
construction lubricants) Up to 31 within 10
On 1 January Limited Liability materials, 4.67 24,701.25 January business
2013 Company Stroyservice fuels, and m^3 (Lumber 2013. No days from
lubricants and extension. the date of
construction invoice
materials)
1,358 tonnes Invoices to
(diesel fuel be issued
oil) 218 monthly and
tonnes Up to 31 payments
On 1 January “KraMZ-Auto” Limited Fuels and 1.47 (gasoline) January are to be
2013 Liability Company lubricants 33 tonnes 2013. No made before
(Other fuels extension. the 10th
and day of the
lubricants) following
month
Up to 31
January
2013. The
contract
will be
extended
by an
addendum
but either
party can
On 26 choose not 100%
December 2012 LLC “KraMZ” Silicon 1.2 500 tonnes to renew pre-payment
the
contract
without
prior
consent of
the other
party 20
days
before the
end of
contract
Up to 31
January
2013. The
contract
will be
extended
by an
addendum
but either
party can
On 26 LLC “Autocomponent - choose not 100%
December 2012 Group GAZ” Silicon 0.87 360 tonnes to renew pre-payment
the
contract
without
prior
consent of
the other
party 20
days
before the
end of
contract
Total
consideration
payable for
the year 11.09
ending 31
December
2013:
For each of the contracts set out in the table above, the consideration 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 under the 2013 Raw Materials Supply Contracts are required to be
aggregated, as they were/will be entered into by the Group with the associates
of the same connected persons or with parties connected or otherwise
associated with one another, and the subject matter of each of the contracts
relates to the supply of raw materials by the Group.
The annual aggregate transaction amount payable under the 2013 Raw Materials
Supply Contracts is estimated to be up to approximately USD11.09 million for
the year ending 31 December 2013.
The annual aggregate amounts are estimated by Directors based on the maximum
amount of consideration payable under the terms of the 2013 Raw Materials
Supply Contracts.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The entry into of the 2013 Raw Materials Supply Contracts is part of the
Group’s inventory management process. The last two contracts as listed in the
table under the paragraph headed “2013 Raw Materials Supply Contracts” above
are also entered into in order to comply with the requirements of the Federal
Antimonopoly Service. As the Federal Antimonopoly Service instructs, the Group
is required to supply the raw materials to local consumers subject to existing
capacities. As to the three contracts in which “KraMZ-Auto” Limited Liability
Company is the buyer, the contracts are also entered into for the purpose of
maintaining the uninterrupted operation of “KraMZ-Auto” Limited Liability
Company, which in turn provides transportation services to the Group. Such
contracts also help to keep the cost of transportation services provided by
“KraMZ-Auto” Limited Liability Company lower than the other transportation
service providers in the region. As to the contract in which Limited Liability
Company Stroyservice is the buyer, the contract was entered into for
maintaining the uninterrupted operation of Limited Liability Company
Stroyservice, which in turn produces and supplies accessories to the Group
required for fastening market-grade aluminium in railcars. Such contract helps
to reduce the cost of the relevant accessories. The entry into of the 2013 Raw
Materials Supply Contracts is in the ordinary and usual course of business of
the Group. The Company believes that the entry into of the 2013 Raw Materials
Supply Contracts with its connected persons is for the benefit of the Company
as the Group is assured of payment on a timely basis.
The terms of the 2013 Raw Materials Supply Contracts have been negotiated on
arm’s length basis between members of the Group and the associates of En+
and/or Mr. Deripaska, and the transactions are entered into on normal
commercial terms. The consideration payable under the 2013 Raw Materials
Supply Contracts has been arrived at by reference to market price and on terms
no less favourable than those prevailing in the Russian market for raw
materials of the same type and quality and those offered by members of the
Group to independent third parties.
The Directors (including the independent non-executive Directors) consider
that the 2013 Raw Materials Supply Contracts have been negotiated on an arm’s
length basis and on normal commercial terms which are fair and reasonable and
the transactions contemplated thereunder 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 2013 Raw Materials Supply Contracts save for Mr. Deripaska who is
indirectly interested in more than 30% of the issued share capital of each of
Closed Joint Stock Company “Irkutskenergoremont”, “KraMZ-Auto” Limited
Liability Company, Limited Liability Company Stroyservice, LLC “KraMZ”, LLC
“Autocomponent - Group GAZ” through his shareholding in either in En+ or Basic
Element. Accordingly, Mr. Deripaska did not vote on the Board resolutions
approving the 2013 Raw Materials Supply Contracts.
LISTING RULES IMPLICATIONS
Each of Limited Liability Company Stroyservice, LLC “Autocomponent - Group
GAZ” is held by Basic Element as to more than 30% of the issued share capital.
Basic Element is in turn held by Mr. Deripaska (the chief executive officer of
the Company and an executive Director) as to more than 50% of the issued share
capital. Each of Limited Liability Company Stroyservice, LLC “Autocomponent -
Group GAZ” is therefore an associate of Mr. Deripaska and is thus a connected
person of the Company.
Each of Closed Joint Stock Company “Irkutskenergoremont”, “KraMZ-Auto” Limited
Liability Company, LLC “KraMZ” is held by En+ (a substantial shareholder of
the Company) as to more than 30% of the issued share capital. En+ is in turn
held by Mr. Deripaska as to more than 50% of the issued share capital. Each of
Closed Joint Stock Company “Irkutskenergoremont”, “KraMZ-Auto” Limited
Liability Company, LLC “KraMZ” is therefore an associate of Mr. Deripaska and
of En+, and thus a connected person of the Company.
Accordingly, the transactions contemplated in the 2013 Raw Materials Supply
Contracts constitute continuing connected transactions of the Company.
As the applicable percentage ratios (other than the profits ratio) for the
2013 Raw Materials Supply Contracts for the year ending 31 December 2013 are
more than 0.1% but less than 5%, pursuant to Rule 14A.34 of the Listing Rules,
the transactions contemplated under the 2013 Raw Materials Supply Contracts
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. They are exempt from the independent shareholders’ approval
requirements of Chapter 14A of the Listing Rules.
Details of the 2013 Raw Materials Supply Contracts 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.
LLC “Autocomponent - Group GAZ” is principally engaged in the motor-car
industry.
LLC “KraMZ” is principally engaged in aluminium alloys production.
“KraMZ-Auto” Limited Liability Company is principally engaged in the provision
of transportation services.
Limited Liability Company Stroyservice is principally engaged in the provision
of transportation services and construction materials.
Closed Joint Stock Company “Irkutskenergoremont” is principally engaged in the
provision of repair services.
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 of the Company
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
“Mr. Deripaska” Mr. Oleg Deripaska, the chief executive officer
of the Company and an executive Director
“percentage ratios” the percentage ratios under Rule 14.07 of the
Listing Rules
Open Joint Stock Company “United Company RUSAL
“RUSAL TH” Trading House”, a company incorporated in the
Russian Federation and an indirect wholly-owned
subsidiary of the Company
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“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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