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United Company RUSAL Plc: Continuing Connected Transactions

  United Company RUSAL Plc: Continuing Connected Transactions

Business Wire

HONG KONG -- January 28, 2013

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
                   PURCHASE OF RAW MATERIALS FOR PRODUCTION


Reference is made to the announcement of the Company dated 28 December 2012 in
relation to, among other things, certain purchase of raw materials agreements.

The Company announces that on 28 January 2013, RUSAL TH, being a subsidiary of
the Company, as buyer, entered into the Cathode Blocks Supply Agreement with
Doncarb Graphite, as seller.

The estimated annual aggregate transaction amount of the continuing connected
transactions under the Cathode Blocks Supply Agreement and the Previously
Disclosed Purchase of Raw Materials Agreements for the financial year ending
31 December 2013 is more than 0.1% but less than 5% under the applicable
percentage ratios (other than the profits ratio). Accordingly, pursuant to
Rule 14A.34 of the Listing Rules, the transactions contemplated under these
agreements 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.

CATHODE BLOCKS SUPPLY AGREEMENT

The Company announces that on 28 January 2013, RUSAL TH, being a subsidiary of
the Company, as buyer, entered into an agreement with Doncarb Graphite, as
seller, pursuant to which RUSAL TH agreed to purchase and Doncarb Graphite
agreed to supply cathode blocks in the estimated amount of up to 149 tonnes
for the year ending 31 December 2013, for an estimated total consideration of
approximately USD0.33 million (the “Cathode Blocks Supply Agreement”). The
scheduled termination date of the Cathode Blocks Supply Agreement is 31
December 2013.

Under the Cathode Blocks Supply Agreement, the consideration is to be paid
upon delivery 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 Cathode Blocks Supply Agreement and the
Previously Disclosed Purchase of Raw Materials Agreements should 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 purchase of raw materials by members of the Group for the
purposes of the Group’s production.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Based on the terms of the Cathode Blocks Supply Agreement and the Previously
Disclosed Purchase of Raw Materials Agreements, the annual aggregate
transaction amount that is payable by the Group to the associates of each of
Mr. Vekselberg and Mr. Blavatnik for the financial year ending 31 December
2013 is estimated to be up to approximately USD23.65 million.

This annual aggregate transaction amount is estimated by the Directors based
on the amount of raw materials to be supplied and their contract price for the
purpose of the Group’s production.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the transactions contemplated under the Cathode
Blocks Supply Agreement are for the benefit of the Company as Doncarb Graphite
has close proximity to the Group’s smelter and can supply the raw materials at
a competitive price.

The consideration payable under the Cathode Blocks 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 raw materials of the same type
and quality as those offered by the associates of each of Mr. Vekselberg and
Mr. Blavatnik to independent third parties.

The Directors (including the independent non-executive Directors) consider
that the Cathode Blocks Supply Agreement has been negotiated on an arm’s
length basis and on normal commercial terms which are fair and reasonable and
the transactions contemplated under the Cathode Blocks 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 Cathode Blocks Supply Agreement, save for Mr. Blavatnik, a
non-executive Director, who is interested in more than 30% in Doncarb
Graphite. Accordingly, Mr. Blavatnik did not vote on the Board resolutions to
approve the Cathode Blocks Supply Agreement.

LISTING RULES IMPLICATIONS

Each of Mr. Vekselberg and Mr. Blavatnik indirectly holds more than 30% of the
issued share capital of Doncarb Graphite. Doncarb Graphite is therefore an
associate of each of Mr. Vekselberg (who was a non-executive Director of the
Company until his resignation with effect from 16 March 2012) and Mr.
Blavatnik (who is a non-executive Director). On this basis, Doncarb Graphite
is an associate of each of Mr. Vekselberg and Mr. Blavatnik and hence a
connected person of the Company under the Listing Rules.

The estimated annual aggregate transaction amount of the continuing connected
transactions under the Cathode Blocks Supply Agreement and the Previously
Disclosed Purchase of Raw Materials Agreements for the financial year ending
31 December 2013 is more than 0.1% but less than 5% under the applicable
percentage ratios (other than the profits ratio). Accordingly, pursuant to
Rule 14A.34 of the Listing Rules, the transactions contemplated under these
agreements 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 Cathode Blocks Supply Agreement will be included in the
relevant 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 five continents, the
operations and offices of the Company employ more than 72,000 people.

Doncarb Graphite is principally engaged in production of graphite products and
spare parts.

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
                        
“Doncarb Graphite”      Doncarb Graphite Limited Liability Company, a company
                        incorporated under the laws of the Russian Federation
                        
“Group”                 the Company and its subsidiaries
                        
“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. Vekselberg”        Mr. Victor Vekselberg, whose resignation as a
                        non-executive Director took effect on 16 March 2012

“percentage ratios”        the percentage ratios under Rule 14.07 of the
                            Listing Rules
                            
                            purchase of raw materials agreements pursuant to
                            which members of the Group are the buyers and
“Previously Disclosed       associates of each of Mr. Vekselberg and Mr.
Purchase of Raw Materials   Blavatnik are the sellers, in relation to the
Agreements”                 financial year ending 31 December 2013, as
                            disclosed in the announcement of the Company dated
                            28 December 2012
                            
                            Open Joint Stock Company “United Company RUSAL
“RUSAL TH”                  Trading House”, an indirect wholly-owned
                            subsidiary of the Company
                            
“Stock Exchange”            The Stock Exchange of Hong Kong 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

29 January 2013

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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