United Company RUSAL Plc: Continuing Connected Transactions Sale of Raw Materials

HONG KONG--()--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
SALE OF RAW MATERIALS

Reference is made to the announcements of the Company dated 18 December 2015, 30 December 2015, 27 January 2016, 5 February 2016, 3 March 2016, 15 March 2016, 6 September 2016 and 13 September 2016 in relation to the Previously Disclosed Raw Materials Supply Contracts.

The Company announces that on 18 October 2016, a member of the Group, as seller, entered into the New Raw Materials Supply Contract with an associate of Mr. Deripaska, as buyer.

THE NEW RAW MATERIALS SUPPLY CONTRACT

Reference is made to the announcements of the Company dated 18 December 2015, 30 December 2015, 27 January 2016, 5 February 2016, 3 March 2016, 15 March 2016, 6 September 2016 and 13 September 2016 in relation to the Previously Disclosed Raw Materials Supply Contracts.

The Company announces that on 18 October 2016, a member of the Group, as seller, entered into an addendum to the original contract, dated 8 April 2015, with an associate of Mr. Deripaska, as buyer, with major terms set out below (the “New Raw Materials Supply Contract”):

    Date of addendum  

Seller (member
of the Group)

 

Buyer
(associate of
Mr. Deripaska)

 

Raw
materials to
be supplied

 

Estimated
delivery volume
for the year
ending
31 December
2016

 

Estimated
consideration
payable for the
year ending 31
December 2016
excluding VAT
(USD)

 

Scheduled
termination date

 

Payment
terms

1  

18 October 2016,
which is an addendum
to the original contract,
dated 8 April 2015.

 

Joint Stock
Company
“United
Company
RUSAL-
Trading House”

 

Limited Liability
Company
“Autocomponent-
Group GAZ”

  Silicon  

15 metric tons
(+/-10%)

 

26,565
(Note 1)

 

31 December
2016. The
addendum may be
extended
automatically for
the following
calendar year

 

100%
prepayment

   

Total estimated
consideration payable
for the year

                  26,565        

Note:

1. The contract price is agreed between the parties and based on per unit price of USD1,610/ton.The consideration under the New Raw Materials Supply Contract is to be paid in cash via bank transfer.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the New Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts should be aggregated, as they were entered into by members of the Group with the associates of Mr. Deripaska/En+, and the subject matter of each contract relates to the supply of raw materials by the Group to the associates of Mr. Deripaska/En+.

The annual aggregate transaction amount that is payable by the associates of Mr. Deripaska/En+ to the Group under the New Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts for the financial year ending 31 December 2016 is estimated to be approximately USD16.239 million.

The consideration payable under the New Raw Materials Supply Contract is calculated by multiplying the unit price by the volume. The unit price is set out in the note to the table above.

The consideration payable under the New Raw Materials Supply Contract has been arrived at after arm’s length negotiation 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 and those offered by members of the Group to independent third parties customers. The annual aggregate amount is the maximum amount of consideration payable under the terms of the New Raw Materials Supply Contract based on the delivery volume estimated by Directors and the demand from the buyer.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the entering into of the New Raw Materials Supply Contract is for the benefit of the Company as the sale is profitable and the Group is assured of payment on a timely basis and there are less financial risks.

The Directors (including the independent non-executive Directors) consider that the New Raw Materials Supply Contract is on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Raw Materials Supply 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 New Raw Materials Supply Contract, save for (i) Mr. Deripaska, who is a director of Basic Element and is interested in more than 50% of the issued share capital of Basic Element; (ii) Ms. Gulzhan Moldazhanova, who is a director of Basic Element; and (iii) Ms. Olga Mashkovskaya, who is a deputy chief executive officer for finance of Basic Element. Basic Element is the holding company of Limited Liability Company “Autocomponent-Group GAZ”. Accordingly, Mr. Deripaska, Ms. Gulzhan Moldazhanova and Ms. Olga Mashkovskaya did not vote on the Board resolutions approving the New Raw Materials Supply Contract.

LISTING RULES IMPLICATIONS

Limited Liability Company “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 (an executive Director) as to more than 50% of the issued share capital. Limited Liability Company “Autocomponent-Group GAZ” is therefore an associate of Mr. Deripaska and is thus a connected person of the Company.

Accordingly, the transactions contemplated under the New Raw Materials Supply Contract constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount of the continuing connected transactions under the New Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts for the financial year ending 31 December 2016 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.

Details of the New Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts will be included in the relevant 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 and sale of aluminium, including alloys and value-added products, and alumina.

Limited Liability Company “Autocomponent-Group GAZ” is principally engaged in production and sales of auto components.

DEFINITIONS

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

“associate(s)”   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.
“Company”

United Company RUSAL Plc, a limited liability company
incorporated in Jersey, the shares of which are listed on the main
board of the Stock Exchange.

“connected person(s)” has the same meaning ascribed thereto under the Listing Rules.
“continuing connected transactions” has the same meaning ascribed thereto under the Listing Rules.
“Director(s)” the director(s) of the Company.
“En+”

En+ Group Limited, a company incorporated in Jersey, 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, an executive Director.
“percentage ratios” the percentage ratios under Rule 14.07 of the Listing Rules.
“Previously Disclosed Raw Materials Supply Contracts”

the raw materials supply contracts entered into between members
of the Group and the associates of Mr. Deripaska/En+, pursuant to
which members of the Group agreed to sell raw materials to
associates of Mr. Deripaska/En+ in 2016, as disclosed in the
announcements of the Company dated 18 December 2015, 30
December 2015, 27 January 2016, 5 February 2016, 3 March 2016,
15 March 2016, 6 September 2016 and 13 September 2016.

“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.

“VAT” value added tax.

By Order of the Board of Directors of

United Company RUSAL Plc

Aby Wong Po Ying

Company Secretary

19 October 2016

As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Mr. Vladislav Soloviev and Mr. Siegfried Wolf, 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), Mr. Philip Lader, Dr. Elsie Leung Oi-sie, Mr. Mark Garber, Mr. Dmitry Vasiliev and Mr. Bernard Zonneveld.

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.

Contacts

United Company RUSAL Plc

Contacts

United Company RUSAL Plc