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United Company RUSAL Plc: Renewal of Annual Caps of Continuing Connected Transactions



  United Company RUSAL Plc: Renewal of Annual Caps of Continuing Connected
  Transactions

Business Wire

HONG KONG -- November 11, 2013

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)

         RENEWAL OF ANNUAL CAPS OF CONTINUING CONNECTED TRANSACTIONS

 
Reference is made to certain continuing connected transactions relating to
electricity and capacity supply and aluminium sales described in the
prospectus of the Company dated 31 December 2009, the annual reports of the
Company for each of the three financial years ended 31 December 2012, the
announcement of the Company dated 27 September 2011 and the circular of the
Company dated 12 October 2011.

Since the existing continuing connected transactions with respect to
electricity and capacity supply and with respect to aluminium sales shall
continue and the Company also expects that additional electricity and capacity
supply and additional aluminium sales contracts may be entered into between
members of the Group on one part and Mr. Deripaska´s Associates, En+´s
Associates or SUAL Partners´ Associates on the other, the Company would like
to announce the new 2014, 2015 and 2016 annual caps for all these continuing
connected transactions.

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for E&C Contracts with En+’s Associates are more than 5%,
the transactions under these contracts will be subject to reporting, annual
review, announcement and independent Shareholders’ approval requirements under
Chapter 14A of the Listing Rules.

 

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for Aluminium Sales Contracts with SUAL Partners’
Associates are more than 5%, the transactions under these contracts will be
subject to reporting, annual review, announcement and independent
Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for Aluminium Sales Contracts with Mr. Deripaska’s
Associates are more than 5%, the transactions under these contracts will be
subject to reporting, annual review, announcement and independent
Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

1. INTRODUCTION

Reference is made to certain continuing connected transactions relating to
electricity and capacity supply and aluminium sales described in the
prospectus of the Company dated 31 December 2009, the annual reports of the
Company for each of the three financial years ended 31 December 2012, the
announcement of the Company dated 27 September 2011 and the circular of the
Company dated 12 October 2011. As disclosed in these publications, certain
members of the Group are parties to a number of existing continuing connected
transactions with respect to electricity and capacity supply and with respect
to aluminium sales. Since the existing continuing connected transactions with
respect to electricity and capacity supply and with respect to aluminium sales
shall continue and the Company also expects that additional electricity and
capacity supply and additional aluminium sales contracts may be entered into
between members of the Group on one part and Mr. Deripaska´s Associates, En+´s
Associates or SUAL Partners´ Associates on the other, the Company would like
to announce the new 2014, 2015 and 2016 annual caps for all these continuing
connected transactions.

2. E&C CONTRACTS

(a) Long-term E&C Contracts with En+´s Associates

As previously disclosed, the Group has entered into the following long-term
electricity and capacity supply contracts:

  * on 1 December 2009, OJSC RUSAL Bratsk (“BrAZ”), a subsidiary of the
    Company, and Irkutsk Joint Stock Power and Electricity Company
    (“Irkutskenergo”), a power generating company controlled by En+ as to more
    than 30% of its issued share capital, entered into a long-term electricity
    and capacity supply contract pursuant to which BrAZ agreed to purchase
    electricity and capacity from Irkutskenergo for a period of nine years
    from 2010 to 2018. Fifty percent of the price under the contract must be
    paid before the 15th day of the month of supply and the remaining fifty
    percent of the price must be paid before the 25th day of the month of
    supply. The consideration is satisfied in cash via wire transfer. The
    actual monetary value of electricity and capacity purchased for the year
    ended 31 December 2012 and the first nine months of 2013 under this
    contract was USD181.1 million and USD74 million respectively;

  * on 15 November 2009, OJSC SUAL, a subsidiary of the Company, and
    Irkutskenergo entered into a long-term electricity and capacity supply
    contract pursuant to which OJSC SUAL agreed to purchase electricity and
    capacity for Irkutsk aluminium smelter, a branch of OJSC SUAL, from
    Irkutskenergo for a period of nine years from 2010 to 2018. Fifty percent
    of the price under the contract must be paid before the 15th day of the
    month of supply and the remaining fifty percent of the price must be paid
    before the 25th day of the month of supply. The consideration is satisfied
    in cash via wire transfer. The actual monetary value of electricity and
    capacity purchased for the year ended 31 December 2012 and the first nine
    months of 2013 under this contract was USD106.5 million and USD55.9
    million respectively; and
  * on 4 December 2009, OJSC RUSAL Krasnoyarsk (“KrAZ”), a subsidiary of the
    Company, and JSC Krasnoyarskaya Hydro-Power Plant (“Krasnoyarskaya HPP”),
    a hydroelectric power station controlled by En+ as to more than 30% of its
    issued share capital, entered into a long-term electricity and capacity
    supply contract pursuant to which KrAZ has agreed to purchase electricity
    from Krasnoyarskaya HPP for a period of eleven years from 2010 to 2020.
    Fifty percent of the price under the contract must be paid before the 15th
    day of the month of supply and the remaining fifty percent of the price
    must be paid before the 25th day of the month of supply. The consideration
    is satisfied in cash via wire transfer. The actual monetary value of
    electricity and capacity purchased for the year ended 31 December 2012 and
    the first nine months of 2013 under this contract was USD71 million and
    USD32.7 million respectively.

The prices for the E&C Contracts are not regulated strictly by the
Non-Commercial Partnership Market Council (“Market Council”), a non-profit
partnership that organises an efficient system of trading on the wholesale and
retail electricity and capacity market in Russia, and may be agreed between
the parties (subject to the Rules of the Wholesale Electricity and Capacity
Market (as approved by the Russian Federation Government Resolution No. 1172
dated 27 December 2010) which contain indirect instruments through which the
influence is exerted on the formation of the total cost of a user’s consumed
electricity and capacity in connection with the existence or non-existence of
non-regulated contracts concluded by such a person, and the amount of capacity
supplied thereunder). The costs of electricity supplied by Irkutskenergo and
Krasnoyarskaya HPP are based on a fixed formula which is tied to the market
prices of electricity and the prices of aluminium quoted on the LME to link
electricity costs to the Group’s revenue.

It is expected that members of the Group may continue to enter into new
long-term electricity and capacity supply contracts with En+´s Associates from
time to time.

(b) Short-term E&C Contracts with the En+´s Associates

Members of the Group, including BrAZ, KrAZ, OJSC RUSAL Sayanogorsk, OJSC RUSAL
Novokuznetsk and OJSC SUAL enter into, from time to time as part of their
ordinary course of business, short-term E&C Contracts with duration not
exceeding one year with companies controlled by En+, including Irkutskenergo,
LLC “Avtozavodskaya CHP” and Krasnoyarskaya HPP.

The electricity and capacity supplied under these short-term E&C Contracts are
derived from the plants operated by Irkutskenergo and Krasnoyarskaya HPP and
also derived from LLC “Avtozavodskaya CHP”. The whole volume of electricity
(excluding electricity supplied to residential users) is supplied at open
(non-regulated) prices. There are exceptions which require the electricity to
be sold at prices or tariffs approved by the government. Payment under each of
these contracts is made by installments in accordance with the regulations of
the Market Council. The consideration is satisfied in cash via wire transfer.

In addition, members of the Group, including OJSC “Sevuralboxitruda”,
“SUAL-Silicon-Ural” LLC, OJSC RUSAL SAYANAL, OJSC “Ural Foil”, UC RUSAL
Energoset LLC and OJSC “South Ural Cryolite Plant” enter into, from time to
time as part of their ordinary course of business, short-term E&C Contracts
not exceeding three years with CJSC MAREM+, a company controlled by En+, for
the supply of electricity and capacity purchased on the wholesale energy and
capacity market. The purchase of electricity and capacity on the wholesale
market is effected at a price which is determined daily (for electricity) and
monthly (for capacity), based on the trading results at the wholesale market,
and subject to unpredictable external fluctuations (including, without
limitation, weather factors, river stream flow rates, hydro-power plant output
storage, transborder cross-flow planning, provision for reserves by power
generation facilities, scheduled equipment repairs, fuel price fluctuations,
details of fuel regime for “endpoint” power generation facilities, economic
efficiency of bids submitted by producers, technological processes of power
generation facilities’ equipment, and effect of state regulation on the market
model). The price under these contracts is derived from the wholesale market
price. Payments are effected by tentatively scheduled installments during each
month, with the final payment effected in the middle of the month following
the month of billing. The consideration is satisfied in cash via wire
transfer.

Members of the Group also from time to time enter into short-term E&C
Contracts with LLC “Irkutskaya Energosbytovaya Company” (“Irkutskenergosbyt
LLC”), a company controlled by En+ as to more than 30%, for the supply of
electricity and capacity purchased at the retail electricity market on normal
commercial terms. Payment under each of these contracts is made by
installments during each month of supply. The consideration is satisfied in
cash via wire transfer.

The actual monetary value of electricity and capacity purchased for the year
ended 31 December 2012 and the first nine months of 2013 under these contracts
was USD288.3 million and USD43.1 million respectively for Irkutskenergo, LLC
“Avtozavodskaya CHP” and Krasnoyarskaya HPP; USD24.7 million and USD32.9
million respectively for CJSC MAREM+; and nil and USD0.1 million respectively
for Irkutskenergosbyt LLC.

It is expected that members of the Group will continue to enter into
short-term E&C Contracts with associates of En+ from time to time.

(c) Miscellaneous E&C Contracts with the En+´s Associates

The Group has also from time to time entered into miscellaneous electricity
and capacity transmission contracts with “Irkutsk Electronetwork Company” OJSC
and energy supply contracts with Irkutskenergosbyt LLC to furnish the
electricity supply mentioned above, each being a company controlled by En+ as
to more than 30% of its issued share capital.

The consideration paid or payable under such miscellaneous electricity and
capacity transmission contracts is determined by reference to the tariffs
which are regulated by the Tariff Service of the Irkutsk region (an executive
authority of the Irkutsk region in the sphere of government regulation of
tariffs including electricity and capacity transmission tariffs) or the
executive authority of the Krasnoyarsk region, and on terms which are uniform
for all consumers (tariffs are differentiated depending on voltage levels).

Under the supply services contracts (miscellaneous electricity and capacity
transmission contracts) with “Irkutsk Electronetwork Company” OJSC , 50% of
the price under the contract must be paid before the 15th day of the month of
supply and the remaining 50% of the price must be paid before the 25th day of
the month of supply. The consideration is satisfied in cash via wire transfer.

Under the supply services contracts (energy supply contracts) with
Irkutskenergosbyt LLC, 100% of the installed capacity and 50% of the estimated
electricity shall be paid before the 15th day of the billing month and the
remaining 50% of the estimated electricity shall be paid before the 25th day
of the billing month. The difference between the actual cost of energy and
power, determined by metering devices, and previously paid amounts shall be
paid before the 10th day of the month following the billing month. The
consideration is satisfied in cash via bank transfer.

The actual monetary value of electricity and capacity transmission purchased
and sold for the year ended 31 December 2012 and the first nine months of 2013
under these contracts with companies controlled by En+ was USD183.1 million
and USD95.4 million respectively.

It is expected that members of the Group will continue to enter into
miscellaneous electricity and capacity transmission contracts with associates
of En+ from time to time.

Historical transaction figures for E&C Contracts with En+’s Associates

For the three years ended 31 December 2010, 31 December 2011 and 31 December
2012 and the first nine months in 2013, the amount purchased under the E&C
Contracts with En+’s Associates was USD 520 million, USD 778.1 million, USD
854.7 million and USD334.1 million respectively.

Proposed 2014/2015/2016 Caps for E&C Contracts with En+’s Associates

The Board has considered and proposes the following annual caps in respect of
the transactions under the E&C Contracts entered into/to be entered into with
En+´s Associates for the years ending 31 December 2014, 31 December 2015 and
31 December 2016:

Period                    Annual Cap
                          USD 1,016 million (net of VAT and using the exchange
Year ending 31 December   rate at USD 1 = RUB 33 subject to possible change
2014                      due to the fluctuations of the RUB/USD exchange
                          rate)
                          USD 1,054 million (net of VAT and using the exchange
Year ending 31 December   rate at USD 1 = RUB 33 subject to possible change
2015                      due to the fluctuations of the RUB/USD exchange
                          rate)
                          USD 1,155 million (net of VAT and using the exchange
Year ending 31 December   rate at USD 1 = RUB 33 subject to possible change
2016                      due to the fluctuations of the RUB/USD exchange
                          rate)

The Proposed 2014/2015/2016 Caps for E&C Contracts with En+’s Associates were
calculated on the basis of (i) the abovementioned historical figures; (ii) the
estimated amounts in accordance with the rules for purchase of capacity in the
wholesale electricity supply market in Russia; (iii) the expected energy
demand for our aluminium smeltering processes for the years of 2014, 2015 and
2016; and (iv) the increase of the transmission and electricity tariffs in
Russia, using the exchange rate at USD 1 = RUB 33 subject to possible change
due to the fluctuations of the RUB/USD exchange rate.

Reasons for and benefits of entering into the E&C Contracts

The Company considers that the E&C Contracts will help secure a stable source
of supply of electricity and capacity for the aluminium smelters of the Group
and reduce unpredictability in price movements amidst the deregulating
electricity supply market in Russia. Linking the electricity cost to the price
of its products also tends to reduce the effect of volatility in the market
price of aluminium on the Group’s margins.

The Directors consider that the Proposed 2014/2015/2016 Caps for E&C Contracts
with En+’s Associates are fair and reasonable and in the interests of the
Company and the Shareholders as a whole.

3. ALUMINIUM SALES CONTRACTS

As previously disclosed, members of the Group have entered into aluminium
sales contracts with SUAL Partners´ Associates and Mr. Deripaska´s Associates.

Aluminium Sales Contracts with SUAL Partners’ Associates

Kamensk-Uralsky Metallurgical Works Joint-Stock Company (“OJSC KUMZ”) is a
company controlled by SUAL Partners as to more than 30%. OJSC KUMZ is
therefore an associate of SUAL Partners. Accordingly, transactions between
companies of the Group and OJSC KUMZ, discussed below, constitute continuing
connected transactions of the Company under the Listing Rules.

On 4 October 2007, the Group through Open Joint Stock Company “United Company
RUSAL - Trading House (“UC RUSAL TH”), being a wholly-owned subsidiary of the
Company, entered into a long-term contract to supply aluminium to OJSC KUMZ,
for a period until December 2021. The price was set on arm’s length terms,
which is linked to the price of aluminium on the LME. All consideration is
satisfied in cash via wire transfer.

As disclosed in the Company’s announcement dated 18 March 2011, during 2010,
the Group through UC RUSAL TH, entered into a series of contracts with OJSC
KUMZ, supplemental to the long-term aluminium sales contract with OJSC KUMZ,
under which UC RUSAL TH agreed to supply aluminium produced by the Group’s
smelters to OJSC KUMZ, the exact products and price of which were determined
on arm’s length terms on a monthly basis. Similar contracts between members of
the Group and OJSC KUMZ have been concluded from time to time during 2012 and
2013 and are expected to be concluded during subsequent years . The
consideration under the long-term contract is required to be paid within 30
days from delivery. The contracts supplemental to the long-term contract
require 100% prepayment. All consideration is satisfied in cash via wire
transfer.

The total consideration for the aluminium supplied under these contracts to
OJSC KUMZ during the year ended 31 December 2012 and the first nine months of
2013 amounted to USD158.5 million and USD72.9 million respectively.

It is expected that members of the Group will continue to enter into aluminium
sales contracts with SUAL Partners´ Associates from time to time.

Aluminium Sales Contracts with Mr. Deripaska’s Associates

Mr. Deripaska, the Chief Executive Officer of the Company and an executive
Director, indirectly controls more than 30% of each of (i) LLC Tradecom, (ii)
Limited liability company “Krasnoyarsk Metallurgical Plant (“LLC KraMZ”),
(iii) Joint Stock Company Dmitrov “Aluminium Rolling Mill” (“DOZAKL”), (iv)
members of the group of Open Joint Stock Company “GAZ” (the “GAZ Group”)
including LLC Torgovo-Zakupochnaya Kompaniya GAZ (“LLC GAZ”) , “GAZ Group
Autocomponents” LLC, OJSC “UMZ”, JSC AVTODIZEL, JSC “URAL Motor Vehicles
Plant”, (v) OJSC “Plant MOSMEK” (formerly known as Glavstroy-MOSMEK), and (vi)
Joint Stock Company “Barnaultransmash,” (“Barnaultransmash”). Each of these
companies is therefore an associate of Mr. Deripaska. As such, the
transactions between members of the Group and LLC Tradecom, LLC KraMZ, DOZAKL,
members of the GAZ Group (including LLC GAZ, “GAZ Group Autocomponents” LLC,
OJSC “UMZ”, JSC AVTODIZEL, JSC “URAL Motor Vehicles Plant”), OJSC “Plant
MOSMEK” and Barnaultransmash, discussed below, constitute continuing connected
transactions of the Company under the Listing Rules.

(a) LLC Tradecom and LLC KraMZ

On 14 December 2006, the Group through UC RUSAL TH, entered into a long-term
contract to supply aluminium to LLC Tradecom for a period until December 2021.
Pursuant to the contract, the Group would supply aluminium to LLC Tradecom at
arm’s length prices tied to the price of aluminium on the LME. The
consideration under the contract must be prepaid.

As disclosed in the Company’s announcement dated 18 March 2011, a substitution
agreement was signed by UC RUSAL TH, LLC Tradecom and LLC KraMZ on 17 March
2011 pursuant to which LLC KraMZ substituted LLC Tradecom as the buyer to the
above long-term supply contract.

The consideration for the aluminium supplied under this contract (as
supplemented) to LLC KraMZ during the year ended 31 December 2012 and the
first nine months of 2013 amounted to USD237 million and USD113.5 million
respectively. The consideration was satisfied in cash via wire transfer.

(b) Members of GAZ Group

  * On 28 February 2009, the Group through UC RUSAL TH, entered into a
    framework agreement with LLC GAZ pursuant to which the Group agreed to
    supply aluminium at arm’s length prices on a monthly basis until 31
    December 2010. The consideration was to be partially pre-paid with the
    remaining amount to be settled within 30 business days from shipment. The
    agreement was to be automatically extended for another calendar year
    unless the parties declared their intention to terminate it. As at 31
    December 2012, the agreement was not extended, and similar contracts with
    duration not exceeding three years were entered into between members of
    the Group and members of the GAZ Group (including the agreements each
    dated 1 January 2013 with each of “GAZ Group Autocomponents” LLC, OJSC
    “UMZ”, JSC AVTODIZEL and JSC “URAL Motor Vehicles Plant”).

    The total consideration for the aluminium supplied under these contracts
    to LLC GAZ, “GAZ Group Autocomponents” LLC, OJSC “UMZ”, JSC AVTODIZEL and
    JSC “URAL Motor Vehicles Plant” during the year ended 31 December 2012 and
    the first nine months of 2013 amounted to nil and USD5 million
    respectively. The consideration was satisfied in cash via wire transfer.
  * On 27 September 2010, RUSAL RESAL Limited Liability Company (“RUSAL
    RESAL”), a wholly-owned subsidiary of the Company, entered into a
    short-term agreement to supply secondary aluminium to LLC GAZ for a period
    until 31 December 2010 at arm’s length prices determined on a monthly
    basis. 100% of the consideration would be paid in 60 business days upon
    shipment. The agreement was to be automatically extended for another
    calendar year unless the parties declared their intention to terminate it.

    The total consideration for the aluminium supplied under this contract to
    LLC GAZ during the year ended 31 December 2012 amounted to USD1.4 million.
    The consideration was satisfied in cash via wire transfer.
  * On 15 February 2012, RUSAL RESAL entered into a short-term agreement to
    supply secondary aluminium to “GAZ Group Autocomponents” LLC for a period
    until 31 December 2012 at arm’s length prices determined on a monthly
    basis. 100% of the consideration must be paid in 60 business days upon
    shipment. The agreement could be automatically extended for another
    calendar year unless the parties declared their intention to terminate it.

    The total consideration for the aluminium supplied under this contract to
    LLC GAZ during the year ended 31 December 2012 amounted to USD 8.38
    million. The consideration was satisfied in cash via wire transfer.

As at 31 December 2012, both of the agreements dated 27 September 2010 and 15
February 2012 were not extended, and similar contracts were entered into
between RUSAL RESAL and members of GAZ Group for the year ending 31 December
2013 (including the agreements each dated 1 January 2013 with each of “GAZ
Group Autocomponents” LLC, OJSC “UMZ”, JSC AVTODIZEL and JSC “URAL Motor
Vehicles Plant”) and the total consideration for the aluminium supplied under
these contracts during the first nine months of 2013 amounted to USD2 million.
The consideration was satisfied in cash via wire transfer.

  * On 30 December 2011, the Group through UC RUSAL TH, entered into the
    contract with “GAZ Group Autocomponents” LLC pursuant to which the Group
    agreed to supply aluminium at arm’s length prices on a monthly basis until
    31 December 2014. The consideration was to be pre-paid. During 2012, the
    Group, through UC RUSAL TH, entered into addendums to this aluminium sale
    contract with “GAZ Group Autocomponents” LLC from time to time and the
    Company expects more addendums or similar contracts will be entered into
    with members of the GAZ Group in 2013, 2014, 2015 and 2016.

The total consideration for the aluminium supplied under this contract to “GAZ
Group Autocomponents” LLC during the year ended 31 December 2012 and the first
nine months of 2013 amounted to USD13.9 million and USD0.7 million
respectively. The consideration was satisfied in cash via wire transfer.

(c) DOZAKL

  * On 14 December 2006, the Group through UC RUSAL TH, entered into a
    long-term contract to supply aluminium to DOZAKL for a period until 31
    December 2021 at arm’s length prices tied to the price of aluminium on the
    LME. The consideration was to be paid within 30 days from delivery. Since
    March 2010, there have been no supplies under this contract.

    The consideration for the aluminium supplied under this contract to DOZAKL
    during the year ended 31 December 2012 amounted to nil.
  * On 1 January 2012, Rusal Foil LLC, a wholly-owned subsidiary of the
    Company, entered into a contract to supply aluminium tape to DOZAKL at
    arm’s length prices tied to the price of aluminium on the LME until 31
    December 2012. The consideration was to be paid within 30 days from
    delivery.
  * On 1 January 2013, Rusal Foil LLC, a wholly-owned subsidiary of the
    Company, entered into a contract to supply aluminium tape to DOZAKL at
    arm’s length prices tied to the price of aluminium on the LME until 31
    December 2013. The consideration is paid within 30 days from the date of
    delivery. Similar contracts will be entered into between Rusal Foil LLC
    and DOZAKL in 2014, 2015 and 2016.

    The consideration for the aluminium tape supplied under these contracts to
    DOZAKL during the year ended 31 December 2012 and the first nine months of
    2013 amounted to USD7.7 million and USD2.7 million respectively. The
    consideration was satisfied in cash via wire transfer.

(d) OJSC “Plant-MOSMEK”

On 30 December 2011, the Group through UC RUSAL TH, entered into an agreement
to supply aluminium products to OJSC “Plant MOSMEK” for a period until 31
December 2014. Under this contract UC RUSAL TH supplies aluminium at arm’s
length prices determined on a monthly basis. Consideration is to be pre-paid.

The consideration for the aluminium supplied under this contract to OJSC
“Plant MOSMEK” during the year ended 31 December 2012 and the first nine
months of 2013 amounted to USD0.8 million and nil respectively. The
consideration was satisfied in cash via wire transfer. During 2012, the Group,
through UC RUSAL TH, entered into addendums to this aluminium sale contract
with OJSC “Plant MOSMEK” from time to time and the Company expects more
addendums or similar contracts will be entered into with OJSC “Plant MOSMEK”
in 2013, 2014, 2015 and 2016.

(e) Barnaultransmash

On 28 January 2009, the Group through RUSAL TH, entered into a contract to
supply aluminium to Barnaultransmash for a period until 30 August 2009. RUSAL
TH and Barnaultransmash did not declare their intention to terminate the
contract and therefore tacitly consented to its extension for 2010 and 2011.
Under this contract, RUSAL TH supplied aluminium at arm’s length prices
determined on a monthly basis. The consideration for the aluminium supplied
under this contract was prepaid. This contract was terminated on 31 December
2011. Similar contracts with duration not exceeding three years were or will
be concluded between members of the Group and Barnaultransmash in 2013, 2014,
2015 and 2016.

The aggregate consideration received for the aluminium supplied to each of the
companies referred to above, which are Mr. Deripaska´s Associates, for the
year ended 31 December 2012 and the first nine months of 2013 was
approximately USD269.2 million and USD125.4 million respectively.

It is expected that members of the Group will continue to enter into aluminium
sales contracts with Mr. Deripaska´s Associates from time to time.

Historical transaction figures for Aluminium Sales Contracts

A breakdown of the approximate historical transaction figures for the
Aluminium Sales Contracts is as follows:

  * With respect to Aluminium Sales Contracts with SUAL Partners’ Associates:

    For the three years ended 31 December 2010, 31 December 2011 and 31
    December 2012 and the first nine months in 2013, the aggregate
    consideration received by members of the Group under the Aluminium Sales
    Contracts with SUAL Partners’ Associates was USD176.2 million, USD198.1
    million, USD 159.5 million and USD73.2 million respectively.
  * With respect to Aluminium Sales Contracts with Mr. Deripaska’s Associates:

    For the three years ended 31 December 2010, 31 December 2011 and 31
    December 2012 and the first nine months in 2013, the aggregate
    consideration received by members of the Group under the Aluminium Sales
    Contracts with Mr. Deriparska’s Associates was USD302.26 million, USD319.2
    million, USD269.2 million and USD125.4 million respectively.

Proposed 2014/2015/2016 Caps for Aluminium Sales Contracts

The Board has considered and proposes the following annual caps in respect of
the transactions under the Aluminium Sales Contracts for the years ending 31
December 2014, 31 December 2015 and 31 December 2016.

The Proposed 2014/2015/2016 Caps for Aluminium Sales Contracts with SUAL
Partners’ Associates:

Period                         Annual Cap
Year ending 31 December 2014   USD 567 million (net of VAT)
Year ending 31 December 2015   USD 700 million (net of VAT)
Year ending 31 December 2016   USD 749 million (net of VAT)

The Proposed 2014/2015/2016 Caps for Aluminium Sales Contracts with Mr.
Deripaska’s Associates:

Period                         Annual Cap
Year ending 31 December 2014   USD 575 million (net of VAT)
Year ending 31 December 2015   USD 861 million (net of VAT)
Year ending 31 December 2016   USD 961 million (net of VAT)

The Proposed 2014/2015/2016 Caps for Aluminium Sales Contracts were calculated
on the basis of the historical figures and anticipated changes in the quantity
of aluminium supplied by the Group due to an expected increase in demand from
Russian purchasers.

Reasons for and benefits of entering into the Aluminium Sales Contracts

As a part of the Group’s ordinary course of business and antimonopoly
requirements to supply aluminium to Russian purchasers, members of the Group
have entered into long-term and short-term Aluminium Sales Contracts in
Russia. It is common for industrial concerns to enter into long-term supply
contracts for raw materials to ensure that production would not be
interrupted. Given that the price of the aluminium supplied under these
Aluminium Sales Contracts is based on the market price of aluminium, the
Directors are of the view that these contracts have been entered into in the
usual and ordinary course of business of the Group and are in the interests of
the Company and the Shareholders as a whole.

The Directors considers that the Proposed 2014/2015/2016 Caps for Aluminium
Sales Contracts are fair and reasonable and in the interests of the Company
and the Shareholders as a whole.

4. LISTING RULES IMPLICATIONS

As at the date of this announcement:

  * En+, which is controlled by Mr. Deripaska as to more than 50% of the
    issued share capital, is interested in approximately 48.13% of the issued
    share capital of the Company;
  * Mr. Deripaska, an executive Director and the chief executive officer of
    the Company, is, directly and indirectly (including through his interest
    in En+), interested in approximately 48.36% of the issued share capital of
    the Company;
  * SUAL Partners is interested in more than 15% of the issued share capital
    of the Company.

Accordingly, each of En+, Mr. Deripaska and SUAL Partners and their respective
associates is a connected person of the Company under the Listing Rules and
therefore transactions as mentioned above between each of them on one part and
members of the Group on the other constitute connected transactions of the
Company under the Listing Rules.

(a) E&C Contracts

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for E&C Contracts with En+’s Associates are more than 5%,
transactions under these contracts will be subject to reporting, annual
review, announcement and independent Shareholders’ approval requirements under
Chapter 14A of the Listing Rules.

(b) Aluminium Sales Contracts

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for Aluminium Sales Contracts with SUAL Partners’
Associates are more than 5%, the transactions under these contracts will be
subject to reporting, annual review, announcement and independent
Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

As the applicable percentage ratio(s) with respect to the Proposed
2014/2015/2016 Caps for Aluminium Sales Contracts with Mr. Deripaska’s
Associates are more than 5%, transactions under these contracts will be
subject to reporting, annual review, announcement and independent
Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

5. APPROVAL BY INDEPENDENT SHAREHOLDERS

The Company will seek independent Shareholders’ approval in respect of (i) the
Proposed 2014/2015/2016 Caps for E&C Contracts with En+’s Associates, (ii) the
Proposed 2014/2015/2016 Caps for Aluminium Sales Contracts with SUAL Partners’
Associates and (iii) the Proposed 2014/2015/2016 Caps for Aluminium Sales
Contracts with Mr. Deripaska’s Associates (together, the “Relevant Proposals”)
at an extraordinary general meeting (“EGM”). Any Shareholder with a material
interest in the Relevant Proposals will not vote on the relevant resolutions
at the EGM.

In view of the interests of Mr. Deripaska and En+ in the E&C Contracts with
En+’s Associates and Aluminium Sales Contracts with Mr. Deripaska’s
Associates, they and their respective associates will abstain from voting in
relation to the resolutions approving each of (i) the Proposed 2014/2015/2016
Caps for E&C Contracts with En+’s Associates and (ii) the Proposed
2014/2015/2016 Caps for Aluminium Sales Contracts with Mr. Deripaska’s
Associates.

In view of the interests of SUAL Partners in the Aluminium Sales Contracts
with SUAL Partners’ Associates, it and its associates will abstain from voting
in relation to the resolution approving the Proposed 2014/2015/2016 Caps for
Aluminium Sales Contracts with SUAL Partners’ Associates.

In accordance with the Listing Rules, an independent board committee (“IBC”)
was established by the Company to give recommendations to the independent
Shareholders in respect of the Relevant Proposals. An independent financial
adviser (“IFA”) has been appointed to advise the IBC and the independent
Shareholders in relation to the Relevant Proposals.

A circular containing:

(a) further details of the continuing connected transactions relating to the
Relevant Proposals;

(b) the letter from, and recommendations of, the IBC in respect of the
Relevant Proposals;

(c) the letter from the IFA to the IBC and the independent Shareholders in
respect of the Relevant Proposals; and

(d) the notice convening the EGM

will be despatched by the Company to its Shareholders within 15 business days
after the publication of this announcement.

6. GENERAL

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.

Irkutskenergo is a power generating company.

Krasnoyarskaya HPP is a hydroelectric power station.

LLC “Avtozavodskaya CHP” is principally engaged in supply of electric and
thermal energy.

CJSC MAREM+ is principally engaged in sales of electricity and capacity.

“Irkutsk Electronetwork Company” OJSC is principally engaged in transmission
and distribution of electricity.

Irkutskenergosbyt LLC is principally engaged in sales of electricity and
capacity.

OJSC KUMZ is principally engaged in metallurgy.

LLC KraMZ is principally engaged in metallurgy.

DOZAKL is principally engaged in producing different metal products.

GAZ Group is principally engaged in production of autobuses and auto
components.

LLC GAZ is principally engaged in car production.

“GAZ Group Autocomponents” LLC is principally engaged in production of auto
components.

OJSC “UMZ” is principally engaged in production and industrial goods sale,
including automobile and boat motors, motor-pumps, engines, consumer goods,
spare parts to engines and cars; implementation of installation and
construction works, production of construction materials, designs and
buildings, engineering implementation in construction; trade and purchasing
and intermediary activity.

JSC AVTODIZEL is principally engaged in production of diesel engines of a
universal purpose, couplings, transmissions, spare parts to them, and also
stationary units on their base.

JSC “URAL Motor Vehicles Plant” is principally engaged in production of
all-wheel drive heavy-load cars.

Barnaultransmash is principally engaged in machinery.

OJSC “Plant MOSMEK” is principally engaged in production of aluminium rolled
products, the manufacturing of products and equipment used in construction.

7. DEFINITIONS

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

                                  the Aluminium Sales Contracts with Mr.
“Aluminium Sales Contracts”       Deripaska’s Associates and the Aluminium
                                  Sales Contracts with SUAL Partners’
                                  Associates
                                                                              
                                  the aluminium sales contracts entered into
                                  between members of the Group as sellers
“Aluminium Sales Contracts with   and Mr. Deripaska´s Associates as buyers
Mr. Deripaska’s Associates”       from time to time; details of the
                                  subsisting contracts are set out in the
                                  section headed “3. Aluminium Sales
                                  Contracts” in this announcement
                                                                              
                                  the aluminium sales contracts entered into
                                  between members of the Group as sellers
“Aluminium Sales Contracts with   and SUAL Partners´s Associates as buyers
SUAL Partners’ Associates”        from time to time, details of the
                                  subsisting contracts are set out in the
                                  section headed “3. Aluminium Sales
                                  Contracts” in this announcement
                                                                              
“associates”                      has the meaning ascribed to it under the
                                  Listing Rules
                                                                              
“Board”                           the board of Directors of the Company
                                                                              
                                  United Company RUSAL Plc, a company
                                  incorporated under the laws of Jersey with
“Company”                         limited liability, the shares of which are
                                  listed on the main board of the Stock
                                  Exchange
                                                                              
“Controlling Shareholder”         has the meaning ascribed to it under the
                                  Listing Rules
                                                                              
“Director(s)”                     the director(s) of the Company
                                                                              
“E&C Contracts”                   electricity and capacity supply contracts
                                                                              
                                  the E&C Contracts entered into from time
“E&C Contracts with En+’s         to time with En+´s Associates; details of
Associates”                       the subsisting contracts are set out in
                                  the section headed “2. E&C Contracts” of
                                  this announcement
                                                                              
“EGM”                             an extraordinary general meeting
                                                                              
                                  En+ Group Limited, a company incorporated
“En+”                             in Jersey which is the Controlling
                                  Shareholder of the Company
                                                                              
“En+´s Associate(s)”              associate(s) of En+
                                                                              
“Group”                           the Company and its subsidiaries from time
                                  to time
                                                                              
“Hong Kong”                       the Hong Kong Special Administrative
                                  Region of the People’s Republic of China
                                                                              
“IBC”                             an independent board committee
                                                                              
“IFA”                             an independent financial adviser
                                                                              
                                  the Rules Governing the Listing of
“Listing Rules”                   Securities on The Stock Exchange of Hong
                                  Kong Limited
                                                                              
“LME”                             the London Metals Exchange
                                                                              
“Mr. Deripaska”                   Mr. Oleg Deripaska, the Chief Executive
                                  Officer and an executive Director
                                                                              
“Mr. Deripaska´s Associate(s)”    associate(s) of Mr. Deripaska
                                                                              
                                  the Proposed 2014/2015/2016 Caps for
“Proposed 2014/2015/2016 Caps     Aluminium Sales Contracts with Mr.
for Aluminium Sales Contracts”    Deripaska’s Associates” and the Proposed
                                  2014/2015/2016 Caps for Aluminium Sales
                                  Contracts with SUAL Partners’ Associates
                                                                              
“Proposed 2014/2015/2016 Caps     the proposed annual caps for the Aluminium
for Aluminium Sales Contracts     Sales Contracts with Mr. Deripaska’s
with Mr. Deripaska’s              Associates for the three years ending 31
Associates”                       December 2016
                                                                              
“Proposed 2014/2015/2016 Caps     the proposed annual caps for the Aluminium
for Aluminium Sales Contracts     Sales Contracts with SUAL Partners’
with SUAL Partners’ Associates”   Associates for the three years ending 31
                                  December 2016
                                                                              
“Proposed 2014/2015/2016 Caps     the proposed annual caps for the E&C
for E&C Contracts with En+’s      Contracts with En+’s Associates for the
Associates”                       three years ending 31 December 2016
                                                                              
                                  (i) the Proposed 2014/2015/2016 Caps for
                                  E&C Contracts with En+’s Associates, (ii)
                                  the Proposed 2014/2015/2016 Caps for
“Relevant Proposals”              Aluminium Sales Contracts with SUAL
                                  Partners’ Associates and (iii) the
                                  Proposed 2014/2015/2016 Caps for Aluminium
                                  Sales Contracts with Mr. Deripaska’s
                                  Associates
                                                                              
“RUB”                             Russian Rubles, the lawful currency of the
                                  Russian Federation
                                                                              
“Shareholder(s)”                  holder(s) of the share(s) in the Company
                                                                              
“Stock Exchange”                  The Stock Exchange of Hong Kong Limited
                                                                              
                                  SUAL Partners Limited, a company
“SUAL Partners”                   incorporated under the laws of the
                                  Bahamas, which is a substantial
                                  Shareholder
“SUAL Partners´ Associate(s)”     associate(s) of SUAL Partners
                                                                              
“USD”                             United States dollars, the lawful currency
                                  of the United States of America
                                                                              
“VAT”                             value added tax
                                                                              
“%”                               per cent

  By Order of the board of directors of
  United Company RUSAL Plc
  Vladislav Soloviev
  Director

12 November 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
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