United Company RUSAL Plc : Continuing Connected Transactions

  United Company RUSAL Plc : Continuing Connected Transactions

Business Wire

HONG KONG -- October 30, 2013

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


Reference is made to the announcements of the Company dated 28 December 2012,
16 January 2013, 25 January 2013, 28 January 2013, 8 February 2013, 3 July
2013 and 17 September 2013 in relation to certain continuing connected
transactions regarding the supply of raw materials by members of the Group to
the associates of Mr. Deripaska or of En+.

The Company would like to provide updated information in relation to the raw
materials supply contracts.

Reference is made to the announcements of the Company dated 28 December 2012,
16 January 2013, 25 January 2013, 28 January 2013, 8 February 2013, 3 July
2013 and 17 September 2013 in relation to certain continuing connected
transactions regarding the supply of raw materials by members of the Group to
the associates of Mr. Deripaska or of En+ as buyers.

THE 2013 RAW MATERIALS SUPPLY CONTRACTS

The Company announces that on 14 November 2012 and 25 December 2012, RUSAL
Achinsk, an indirect wholly-owned subsidiary of the Company, as seller, agreed
to renew certain raw materials supply contracts which were previously
announced by the Company on 20 December 2011, and entered into a series of
additional agreements to these raw materials supply contracts with the
associates of Mr. Deripaska or of En+, as buyer for the year ending 31
December 2013 (the “Additional Agreements for 2013”).

                                 Estimated           Estimated
                                 consideration       delivery
Raw materials to                 payable for the     volume for   Payment
be supplied       Buyer        year ending 31     the year    terms
                                 December 2013       ending 31
                                 (USD,               December
                                 approximately)      2013
Nepheline mud      Achinsk       3.24 million        603,463      100%
overburden         Cement LLC                        tonnes       pre-payment
Crushed            Achinsk       4.06 million        798,966      100%
limestone          Cement LLC                        tonnes       pre-payment
Clay from          Achinsk       0.12 million        93,516       100%
overburden         Cement LLC                        tonnes       pre-payment
Pulverized coal    Achinsk       4.70 million        60,000       100%
fuel               Cement LLC                        tonnes       pre-payment
Diesel fuel        KraMZ-Auto    131,704             120 tonnes   100%
                   LLC                                            prepayment
Diesel fuel        Achinsk       6,571               6.2 tonnes   100%
                   Cement LLC                                     prepayment
Fuel oil           Achinsk       2,400,323           6,000        100%
                   Cement LLC                        tonnes       prepayment
Black coal         Achinsk       14,480,251          227,170      100%
                   Cement LLC                        tonnes       prepayment
Total estimated
consideration
payable for the                  29.14 million
year ending 31
December 2013:

The Additional Agreements for 2013 are scheduled to be terminated on 31
December 2013, and are renewable upon agreement of both parties. Under each of
the Additional Agreements for 2013, the consideration is to be satisfied in
cash via wire transfer.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.25 of the Listing Rules, the consideration payable under
each of the Additional Agreements for 2013 is required to be aggregated with
the consideration payable under the Previously Disclosed Raw Materials Supply
Contracts since these contracts were entered into by members of 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 matter of
each contract relates to supply of raw materials by the Group to the
associates of the same group of connected persons.

The annual aggregate transaction amount payable under the Additional
Agreements for 2013 and the Previously Disclosed Raw Materials Supply
Contracts is estimated to be approximately USD47.48 million for the year
ending 31 December 2013. The annual aggregate amount of consideration
paid/payable under the terms of the Additional Agreements for 2013 is
estimated by the Company based on preliminary consumption volumes of Achinsk
Cement LLC and KraMZ-Auto LLC, the maximum amount of consideration
paid/payable under the terms of the Additional agreements for 2013 and
expected costs of production of the relevant raw materials at Rusal Achinsk.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The entering into the Additional Agreements for 2013 is for profit-making by
the Group. The Company believes that the entering into the Additional
Agreements for 2013 with its connected persons is for the benefit of the
Company as the Group is assured of payment on a timely basis and there are
less financial risks.

The consideration payable under the Additional Agreement for 2013 has been
arrived at with 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
customers.

The Directors (including the independent non-executive Directors) consider
that the Additional Agreements for 2013 has 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 Additional Agreements for 2013 save for:

(a) Mr. Deripaska who is indirectly interested in more than 30% of the issued
share capital of each of KraMZ-Auto LLC and Achinsk Cement LLC. Accordingly,
Mr. Deripaska did not vote on the Board resolutions approving the Additional
Agreements for 2013; and

(b) Mr. Vladislav Soloviev and Ms. Gulzhan Moldazhanova are directors of En+,
and Mr. Artem Volynets (who ceased to be a Director of the Company since 27
June 2013) was director of En+, which is the holding company of KraMZ-Auto
LLC. Accordingly, Mr. Vladislav Soloviev, Mr. Artem Volynets and Ms. Gulzhan
Moldazhanova did not vote on the Board resolutions approving the diesel fuel
supply contract between RUSAL Achinsk and KraMZ-Auto LLC as mentioned above.

LISTING RULES IMPLICATIONS

Mr. Deripaska is indirectly beneficially interested in more than 30% of
Achinsk Cement LLC. Therefore, Achinsk Cement LLC is an associate of Mr.
Deripaska, the chief executive officer and the executive Director of the
Company, and thus a connected person of the Company.

KraMZ-Auto LLC is an indirect subsidiary of En+, a substantial shareholder of
the Company. Mr. Deripaska is beneficially interested in more than 50% of the
issued share capital of En+ and is therefore indirectly interested in more
than 30% of the issued share capital of KraMZ-Auto LLC. Accordingly,
KraMZ-Auto LLC is an associate of Mr. Deripaska and En+, and therefore a
connected person of the Company.

Accordingly, the transactions contemplated in the Additional Agreements for
2013 constitute continuing connected transactions of the Company.

As the applicable percentage ratios (other than the profits ratio) for the
Additional Agreements for 2013 and the Previously Disclosed 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 Additional Agreements for 2013 and the Previously
Disclosed Raw Materials Supply Contracts are only subject to the reporting and
announcement requirements set out in Rules 14A.45 to 14A.47A, 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 under Chapter 14A of
the Listing Rules.

Details of the Additional Agreements for 2013 and the Previously Disclosed 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 69,000 people.

KraMZ-Auto LLC is principally engaged in the provision of transportation
services.

Achinsk Cement LLC is principally engaged in the production of cement.

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 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
                              
                              En+ Group Limited, a company incorporated in
“En+”                         Jersey and a substantial shareholder 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
                              and an executive Director of the Company
                              
“percentage ratios”           the percentage ratios under Rule 14.07 of the
                              Listing Rules
                              
                              the raw materials supply contracts pursuant to
                              which members of the Group were the sellers and
                              the associates of Mr. Deripaska/En+ were the
“Previously Disclosed Raw     buyers in relation to the financial year ending
Materials Supply Contracts”   31 December 2013, as disclosed in the
                              announcements of the Company dated 28 December
                              2012, 16 January 2013, 25 January 2013, 28
                              January 2013, 8 February 2013, 3 July 2013 and
                              17 September 2013
                              
                              RUSAL Achinsk Open Joint-Stock Company, a
“RUSAL Achinsk”               company incorporated in Russia, 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

31 October 2013

As at the date of this announcement, the executive Directors are Mr. Oleg
Deripaska, Ms. Vera Kurochkina, Mr. Maxim Sokov, Mr. Vladislav Soloviev and
Mr. Stalbek Mishakov, the non-executive Directors are Mr. Dmitry Afanasiev,
Mr. Len Blavatnik, Mr. Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan
Moldazhanova, Mr. Christophe Charlier, Ms. Olga Mashkovskaya and Ms. Ekaterina
Nikitina, and the independent non-executive Directors are Mr. Matthias Warnig
(Chairman), Dr. Peter Nigel Kenny, Mr. Philip Lader, Ms. Elsie Leung Oi-sie
and Mr. Mark Garber.

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
 
Press spacebar to pause and continue. Press esc to stop.