HONG KONG--(BUSINESS WIRE)--Regulatory News:
United Company RUSAL Plc (Paris:RUSAL) (Paris:RUAL):
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UNITED COMPANY RUSAL PLC
(Incorporated under the laws of
Jersey with limited liability)
(Stock Code: 486)
CONTINUING CONNECTED TRANSACTIONS
TRANSPORT LOGISTICS
SERVICES CONTRACTS
The Company announces that, on 20 April 2016 , a member of the Group and an associate of En+ entered into a series of addendums to one of the Previously Disclosed Transport Logistics Services Contracts pursuant to which the associate of En+ agreed to provide transport logistics services.
Reference is made to the announcement of the Company dated 31 December 2015 in relation to the continuing connected transactions regarding the transport logistics services provided by the associates of En+. The Company announces that, on 20 April 2016, a member of the Group and an associate of En+ entered into a series of addendums to one of the Previously Disclosed Transport Logistics Services Contracts pursuant to which the associate of En+ agreed to provide transport logistics services.
ADDENDUM NO. 1
On 20 April 2016, Open Joint Stock Company “United Company RUSAL-Trading House”, a member of the Group, as customer, and LLC “EN+ LOGISTICA”, an associate of En+, as service provider, entered into an addendum to the transport logistics services contract between the same parties dated 30 December 2015 as disclosed in the Company’s announcement dated 30 December 2015 (the “Addendum No. 1”). Pursuant to the Addendum No. 1, LLC “EN+ LOGISTICA” agreed to provide transport logistics services (for transportation of goods by railway) to Open Joint Stock Company “United Company RUSAL-Trading House” for an estimated consideration of approximately USD51,508 (net of VAT) for the year ending 31 December 2016. The scheduled termination date of such contract is 31 December 2016. Under the Addendum No. 1, the consideration is to be paid within 30 days from the invoice issue date of the month following the month of rendering of services. Payment is to be made in cash via wire transfer.
ADDENDUM NO. 2
On 20 April 2016, Open Joint Stock Company “United Company RUSAL-Trading House”, a member of the Group, as customer, and LLC “EN+ LOGISTICA”, an associate of En+, as service provider, entered into an addendum to the transport logistics services contract between the same parties dated 30 December 2015 as disclosed in the Company’s announcement dated 30 December 2015 (the “Addendum No. 2”). Pursuant to the Addendum No. 2, LLC “EN+ LOGISTICA” agreed to provide transport logistics services (for transportation of goods by railway) to Open Joint Stock Company “United Company RUSAL-Trading House” for an estimated consideration of approximately USD30,127 (net of VAT) for the year ending 31 December 2016. The scheduled termination date of such contract is 31 December 2016. Under the Addendum No. 2, the consideration is to be paid within 30 days from the invoice issue date of the month following the month of rendering of services. Payment is to be made in cash via wire transfer.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
The contract price payable under each of the Addendum No.1 and the Addendum No. 2 (collectively, the “Addendums to Transport Logistics Services Contract”) has been determined with reference to the market price and on terms no less favourable than those prevailing in the Russian market for transport logistics services of the same type and quality and those offered by the associates of En+ to independent third parties. The basis of calculation of payments under the Addendums to Transport Logistics Services Contract is the price offered by LLC “EN+ LOGISTICA”, which is approximately 6% to 7% of the total transportation fee (the total transportation fee is based on the estimated number of wagons required for the year ending 31 December 2016 and the prices per wagon depending on direction of transportation (i.e. approximately 17,580 wagons at the price varied from approximately USD40.4 to approximately USD43.5 per wagon for the Addendum No. 1 and approximately 1,798 wagons at the price of approximately USD200 to USD242.86 per wagon for the Addendum No. 2)). The Company invited several organizations to take part in the tender in relation to the relevant transport logistics services and chose the service provider offering the best terms and conditions (taking into account of the price and quality offered by the service provider) and then entered into contract with the chosen service provider. LLC “EN+ LOGISTICA” offered the best terms and conditions in the respective tenders. Pursuant to Rule 14A.81 of the Listing Rules, the Addendums to Transport Logistics Services Contract are required to be aggregated with the Previously Disclosed Transport Logistics Services Contracts as they were each entered into by the Group with the associates of En+ and the subject matter of each contract relates to the provision of transport logistics services by the associates of En+ to the Group.
The annual aggregate transaction amount that is payable by the Group to the associates of En+ under the Addendums to Transport Logistics Services Contract and the Previously Disclosed Transport Logistics Services Contracts for the financial year ending 31 December 2016 is estimated to be up to approximately USD12.022 million. This annual aggregate transaction amount is estimated by the Directors based on the need for the transport logistics services by the Group and the total contract price.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The Addendums to Transport Logistics Services Contract were entered into for the purpose of obtaining bundled services (including organizing the usage of rail road and provision of rail wagons). As obtaining bundled logistic services is more economical than obtaining various logistic services separately from various service providers, and in certain circumstances the independent third parties are incapable of providing such bundled services or offer an uncompetitive price, the member of the Group decided to engage LLC “EN+ LOGISTICA”, which offered a better price under the respective tenders and are able to provide the services required. The Company considers that the transactions contemplated under the Addendums to Transport Logistics Services Contract are for the benefit of the Company as the services provided are required in the production process of the Group.
The Directors (including the independent non-executive Directors) consider that the Addendums to Transport Logistics Services Contract have been negotiated on an arm’s length basis and are on normal commercial terms which are fair and reasonable and the transactions contemplated under the Addendums to Transport Logistics Services Contract 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 under the Addendums to Transport Logistics Services Contract save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of LLC “EN+ LOGISTICA”. Mr. Deripaska is also indirectly interested in more than 50% of the issued share capital of EN+. Accordingly, Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova did not vote on the Board resolutions approving the Addendums to Transport Logistics Services Contract.
LISTING RULES IMPLICATIONS
LLC “EN+ LOGISTICA” is an indirect subsidiary of En+, and is therefore an associate of En+ which is a substantial shareholder of the Company. Accordingly, LLC “EN+ LOGISTICA” is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the Addendums to Transport Logistics Services Contract constitute continuing connected transactions of the Company.
The annual aggregate transaction amount for the financial year ending 31 December 2016 of the continuing connected transactions under the Addendums to Transport Logistics Services Contract is more than 0.1% but less than 5% under the applicable percentage ratios. Accordingly, pursuant to Rule 14A.76 of the Listing Rules, the transactions contemplated under these contracts are only subject to the announcement requirements set out in Rules 14A.35 and 14A.68, the annual review requirements set out in Rules 14A.49, 14A.55 to 14A.59, 14A.71 and 14A.72 and the requirements set out in Rules 14A.34 and 14A.50 to 14A.54 of the Listing Rules. These transactions are exempt from the circular and shareholders’ approval requirements under Chapter 14A of the Listing Rules.
Information on the Addendums to Transport Logistics Services Contract and the Previously Disclosed Transport Logistics Services Contracts will be included in the next annual report and accounts of the Company in accordance with Rule 14A.71 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.
LLC “EN+ LOGISTICA” is principally engaged in the organization of different kinds of transportation services.
DEFINITIONS
In this announcement, the following expressions have the following meanings, unless the context otherwise requires:
| “associate(s)” |
has the same meaning ascribed to it under the Listing |
|
| “Board” | the board of Directors. | |
| “Company” |
United Company RUSAL Plc, a limited liability company |
|
| “connected person” |
has the same meaning ascribed to it under the Listing |
|
|
“continuing connected |
has the same meaning ascribed to it under the Listing |
|
| “Director(s)” | the director(s) of the Company. | |
| “En+” |
En+ Group Limited, a company incorporated in Jersey, a |
|
| “Group” | the Company and its subsidiaries. | |
| “Listing Rules” |
The Rules Governing the Listing of Securities on the |
|
| “Mr. Deripaska” | Mr. Oleg Deripaska, an executive Director. | |
| “percentage ratios” |
the percentage ratios under Rule 14.07 of the Listing |
|
|
“Previously Disclosed |
the contracts entered into between members of the Group |
|
| “Stock Exchange” | The Stock Exchange of Hong Kong Limited. | |
| “subsidiary” |
has the same meaning ascribed to it under the Listing |
|
| “substantial shareholder” |
has the same meaning ascribed to it under the Listing |
|
| “USD” |
United States dollars, the lawful currency of the United |
|
| “VAT” | value added tax. |
|
By Order of the Board of Directors of
|
21 April 2016
As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Mr. Vladislav Soloviev and Mr. Stalbek Mishakov, the non-executive Directors are Mr. Maxim Sokov, Mr. Dmitry Afanasiev, Mr. Len Blavatnik, Mr. Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan Moldazhanova, Mr. Daniel Lesin Wolfe, 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, Dr. Elsie Leung Oi-sie, Mr. Mark Garber and Mr. Dmitry Vasiliev.
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, http://rusal.ru/investors/info/moex/ and http://www.rusal.ru/en/press-center/press- releases.aspx, respectively.