United Company RUSAL Plc: Continuing Connected Transactions Purchase of Raw Materials for Repairing

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
PURCHASE OF RAW MATERIALS FOR REPAIRING

Reference is made to the announcements of the Company dated 22 December 2015, 27 April 2016 and 18 May 2016 in relation to continuing connected transactions regarding purchase of raw materials for repairing.

The Company announces that on 12 July 2016 a member of the Group, as buyer, and an associate of Mr. Blavatnik, as supplier, entered into the New Purchase of Raw Materials for Repairing Contract.

THE NEW PURCHASE OF RAW MATERIALS FOR REPAIRING CONTRACT

The Company announces that on 12 July 2016, a member of the Group, as buyer, and an associate of Mr. Blavatnik, as supplier, entered into a contract pursuant to which the buyer agreed to buy and the supplier agreed to supply raw materials for repairing (the “New Purchase of Raw Materials for Repairing Contract”).

The key terms of the New Purchase of Raw Materials for Repairing Contract are set out below:

No.  

Date of
contract

 

Buyer (member of
the Group)

 

Supplier (an
associate of
Mr. Blavatnik)

 

Raw materials
to be purchased

 

Estimated
purchase
volume

 

Unit price
(Net of
VAT)

 

Estimated
consideration
payable
excluding
VAT (USD)

 

Scheduled
termination
date

 

Payment
terms

1 12 July 2016

Limited Liability
Company Russian
Engineering
Company
(RUS-Engineering)

JSC
ENERGPROM-
Novosibirsk
Electrode Plant

Thermoanthracite

For year
ending 31
December
2016: up to
12,556
tonnes

Up to
USD242.86
per tonne

3,050

31
December
2016
Automatic
renewal up
to 3 years

Within 30
calendar
days from
the date of
shipment

Total estimated
consideration
payable for the
year

3,050

The consideration is to be satisfied in cash via wire transfer or by set-off.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the New Purchase of Raw Materials for Repairing Contract and the Previously Disclosed Purchase of Raw Materials for Repairing Contracts should be aggregated, as they were entered into by members of the Group with the associates of Mr. Blavatnik, and the subject matter of each contract relates to the purchase of raw materials from the associates of Mr. Blavatnik by the Group.

The annual aggregate transaction amount that is payable by the Group to the associates of Mr. Blavatnik under the New Purchase of Raw Materials for Repairing Contract and the Previously Disclosed Purchase of Raw Materials for Repairing Contracts for the financial year ending 31 December 2016 is estimated to be approximately USD28.43 million.

The contract price payable under the New Purchase of Raw Materials for Repairing Contract 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 and those offered by the associates of Mr. Blavatnik to independent third parties.

The Company invited several organizations to take part in the tender in relation to the relevant required purchase of raw materials and chose the contractor offering the best terms and conditions (taking into account the price offered and payment terms) and then entered into the contract with the chosen party. Accordingly, the New Purchase of Raw Materials for Repairing Contract was entered into.

The annual aggregate transaction amount is estimated by the Directors based on the amount of raw materials to be purchased and their contract price.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the New Purchase of Raw Materials for Repairing Contract is for the benefit of the Company, as the supplier can supply raw materials to the Group at a price more favourable than the prevailing market rate based on tender. The New Purchase of Raw Materials for Repairing Contract is entered into for the purposes of purchasing raw materials for repair work.

The Directors (including the independent non-executive Directors) consider that the New Purchase of Raw Materials for Repairing Contract 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 New Purchase of Raw Materials for Repairing 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 by the New Purchase of Raw Materials for Repairing Contract save for Mr. Blavatnik who is indirectly interested in more than 30% of JSC ENERGPROM-Novosibirsk Electrode Plant. Accordingly, Mr. Blavatnik did not vote on the Board resolutions to approve the New Purchase of Raw Materials for Repairing Contract.

LISTING RULES IMPLICATIONS

Mr. Blavatnik, a non-executive Director, indirectly holds more than 30% of the issued share capital of JSC ENERGPROM-Novosibirsk Electrode Plant. JSC ENERGPROM-Novosibirsk Electrode Plant is therefore an associate of Mr. Blavatnik and a connected person of the Company under the Listing Rules.

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

The estimated annual aggregate transaction amount of the continuing connected transactions under the New Purchase of Raw Materials for Repairing Contract 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 Purchase of Raw Materials for Repairing Contract 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.

JSC ENERGPROM-Novosibirsk Electrode Plant is principally engaged in the production of thermoanthracite, graphite electrodes, carbon electrodes, cathode blocks, calcined petroleum coke and electrode paste.

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.

“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.
“Group” the Company and its subsidiaries.
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange.
“Mr. Blavatnik” Mr. Len Blavatnik, a non-executive Director.
“percentage ratios” the percentage ratios under Rule 14.07 of the Listing Rules.

“Previously Disclosed Purchase of
Raw Materials for Repairing
Contracts”

the agreements between members of the Group and
associates of Mr. Blavatnik, pursuant to which the associates
of Mr. Blavatnik agreed to supply raw materials to members
of the Group in 2016, as disclosed in the announcements of
the Company dated 22 December 2015, 27 April 2016 and
18 May 2016.

“Stock Exchange” The Stock Exchange of Hong Kong Limited.
“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

13 July 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