United Company RUSAL Plc: Continuing Connected Transactions Purchase of Assets and Transportation Contract

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UNITED COMPANY RUSAL PLC (Paris:RUSAL) (Paris:RUAL)
(Incorporated
under the laws of Jersey with limited liability)

(Stock
Code: 486)

CONTINUING CONNECTED TRANSACTIONS
PURCHASE OF ASSETS AND
TRANSPORTATION
CONTRACT

 
Reference is made to the announcements of the Company dated 17 June
2016, 29 November 2016 and 30 December 2016 in relation to the
Previously Disclosed Purchase of Assets Contracts; and the
announcements of the Company dated 14 January 2015, 29 December
2015, 20 January 2016, 5 July 2016, 30 December 2016, 16 January
2017, 28 February 2017 and 7 July 2017 in relation to the Previously
Disclosed Transportation Contracts.

The Company announces
that members of the Group and associates of Mr. Deripaska entered
into contracts, pursuant to which the associates of Mr. Deripaska
agreed to sell assets to the members of the Group.

The
Company further announces that a member of the Group entered into an
additional agreement with an associate of En+, pursuant to which the
associate of En+ agreed to provide transportation services to the
member of the Group.

PURCHASE OF ASSETS

THE NEW PURCHASE OF ASSETS CONTRACTS

Reference is made to the announcements of the Company dated 17 June 2016
and 29 November 2016 and 30 December 2016 in relation to the Previously
Disclosed Purchase of Assets Contracts.

The Company announces that members of the Group entered into agreements
with associates of Mr. Deripaska, pursuant to which the associates of
Mr. Deripaska agreed to sell assets to the members of the Group (the “New
Purchase of Assets Contracts
”), details of which are set out below:

Date of agreement Buyer (member of the Group) Seller (associate of Mr. Deripaska) Subject matter Estimated consideration payable for the year ending 31 December
2017 excluding VAT (USD)
Scheduled termination date Payment terms
 
1 19 July 2017 COBAD S.A. LLC “Russian Buses GAZ Group” 6 buses 226,248 31 December 2017 50% of the consideration as advance payment within 10 business days
from the contract (specification) date, remaining 50% of the
consideration to be paid within 45 calendar days after the date of
the bill of lading
2 19 July 2017 COBAD S.A JSC “The Automobile Plant “URAL”” 2 fire-tanker and 1 vacuum machine 189,000 31 December 2017 20% of the consideration as advance payment within 10 business days
from the contract (specification) date; remaining 80% of the
consideration to be paid within 10 business days after receipt of
notification regarding readiness of goods for shipping
3 19 July 2017 Friguia S.A. JSC “The Automobile Plant “URAL”” 2 fire trucks, 3 workshop trucks with crane, 2 workshop trucks, 1
truck mixer and 2 hydraulic lift trucks
768,000 31 December 2017 20% of the consideration as advance payment within 10 business days
from the contract date; remaining 80% of the consideration to be
paid within 10 business days after receipt of notification regarding
readiness of goods for shipping
4 5 December 2016 JSC “Boksit Timana” Limited Liability Company RM-Terex 1 motor grader and 1 excavator 233,723 31 December 2017 Consideration to be paid 30 days after delivery to consignee rail
station
5 21 December 2016 JSC RUSAL Achinsk Limited Liability Company RM-Terex 1 grader 116,924 31 December 2018 Consideration to be paid 30 days after delivery to consignee rail
station
Total estimated consideration payable for the year: 1,533,895

The consideration under the New Purchase of Assets Contracts is to be
paid in cash via wire transfer.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected
transactions contemplated under the New Purchase of Assets Contracts and
the Previously Disclosed Purchase of Assets 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 purchase of assets from the associates of Mr.
Deripaska/En+ by the Group for the year ending 31 December 2017.

The annual aggregate transaction amounts that are payable by the Group
to the associates of Mr. Deripaska/En+ under the New Purchase of Assets
Contracts and the Previously Disclosed Purchase of Assets Contracts for
the year ending 31 December 2017 is estimated to be approximately
USD7.938 million.

The Company chose the contractors offering the best terms and conditions
(taking into account the price, payment terms and ability to conform to
technical requirements) and then entered into the contracts with the
chosen sellers. Accordingly, the New Purchase of Assets Contracts were
entered into.

The contract prices under the New Purchase of Assets Contracts have 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 assets of the same type and quality and those offered
by the associates of Mr. Deripaska to independent third parties.

The annual aggregate transaction amount is derived from the total
contract prices under the New Purchase of Assets Contracts which was
based on the amount of assets to be supplied and its contract price.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The New Purchase of Assets Contracts were entered into for the purpose
of acquiring assets. The Company considers that the transactions
contemplated under the New Purchase of Assets Contracts are for the
benefit of the Company, as the sellers offered the assets to the Group
at a competitive price and the quality of the assets satisfy the
requirement of the Group.

The Directors (including the independent non-executive Directors)
consider that the New Purchase of Assets Contracts are on normal
commercial terms which are fair and reasonable and the transactions
contemplated under the New Purchase of Assets Contracts 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 Purchase of Assets Contracts, 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 interested in the issued share
capital of each of LLC “Russian Buses GAZ Group”, Limited Liability
Company RM-Terex and JSC “The Automobile Plant “URAL”” as to more than
30%. Mr. Deripaska is also indirectly interested in more than 30% of the
issued share capital of each of LLC “Russian Buses GAZ Group” and
Limited Liability Company RM-Terex. Accordingly, Mr. Deripaska, Ms.
Gulzhan Moldazhanova and Ms. Olga Mashkovskaya did not vote on the Board
resolutions approving the New Purchase of Assets Contracts.

LISTING RULES IMPLICATIONS

Each of LLC “Russian Buses GAZ Group”, JSC “The Automobile Plant “URAL””
and Limited Liability Company RM-Terex 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. Each of LLC “Russian Buses GAZ Group”, JSC “The
Automobile Plant “URAL”” and Limited Liability Company RM-Terex is
therefore an associate of Mr. Deripaska and is thus a connected person
of the Company.

The estimated annual aggregate transaction amount of the continuing
connected transactions under the New Purchase of Assets Contracts for
the financial year ending 31 December 2017 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 Assets Contracts and the Previously
Disclosed Purchase of Assets 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.

TRANSPORTATION CONTRACT

THE NEW TRANSPORTATION CONTRACT

Reference is made to the announcements of the Company dated 14 January
2015, 29 December 2015, 20 January 2016, 5 July 2016, 30 December 2016,
16 January 2017, 28 February 2017 and 7 July 2017 in relation to the
Previously Disclosed Transportation Contracts.

The Company announces that a member of the Group entered into an
additional agreement with an associate of En+, pursuant to which the
associate of En+ agreed to provide transportation services to the member
of the Group (the “New Transportation Contract”) with major terms
set out below:

Date of contract   Customer (member of the Group)   Service provider (associate of En+)   Transportation services   Estimated consideration payable for the year ending 31 December
2017 excluding VAT (USD)
  Scheduled termination date   Payment terms
 
Additional agreement dated 19 July 2017 to the contract dated 26
December 2016
LLC “Engineering Construction Company” KraMZ-Auto Transportation services 7,136 (Note 1) 31 December 2017 Payment to be made in two equal installations of 50% of the total
amount, the first installment before the 15th of the month following
the report month, and the second installment before the 30th of the
month following the report month
Total estimated consideration payable for the year 7,136

Note:

1. The service fee is calculated by the demand for transportation
services and the type of vehicle engaged, the quantity of vehicle-hours
and vehicle-hour cost (which ranges from USD1.95 to USD22.23 depending
on vehicle type).

The consideration under the New Transportation Contract is to be paid in
cash via wire transfer or by way of bilateral clearing.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected
transactions contemplated under the New Transportation Contract and the
Previously Disclosed Transportation Contracts should be aggregated for
the financial year ending 31 December 2017, as they were entered into by
members of the Group with the associates of En+, and the subject matter
of each contract relates to the provision of transportation services by
the associates of En+ to the Group.

The annual aggregate transaction amounts that are payable by the Group
to the associates of En+ under the New Transportation Contract and the
Previously Disclosed Transportation Contracts for the financial year
ending 31 December 2017 are estimated to be approximately USD22.125
million.

The Company invited several organizations to take part in the tender in
relation to the required transportation services and chose the
contractor offering the best terms and conditions (taking into account
the price and available routes) and then entered into the contract with
the chosen service provider.

The contract price under the New Transportation 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 transportation services of the same type and quality
and those offered by the associates of En+ to independent third parties.
The annual aggregate transaction amount is derived from the total
contract price under the New Transportation Contract, which was based on
the need of transportation services by the Group for the relevant year.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The New Transportation Contract was entered into for the purpose of
transporting goods, cargoes and/or passenger forwarding of the Group.
The Company considers that the transactions contemplated under the New
Transportation Contract are for the benefit of the Company, as the
services provided are required in the production process of the Group
and the service providers offered a competitive price and is capable of
meeting the Group’s transportation needs.

The Directors (including the independent non-executive Directors)
consider that the New Transportation Contract is on normal commercial
terms which are fair and reasonable and the transactions contemplated
under the New Transportation 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 Transportation 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
KraMZ-Auto. 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 resolution approving the New Transportation Contract.

LISTING RULES IMPLICATIONS

KraMZ-Auto is an indirect subsidiary of En+, and is therefore an
associate of En+ which is a substantial shareholder of the Company.
Accordingly, KraMZ-Auto is a connected person of the Company under the
Listing Rules.

Accordingly, the transactions contemplated under the New Transportation
Contract constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount of the continuing
connected transactions under the New Transportation Contract and the
Previously Disclosed Transportation Contracts for the financial year
ending 31 December 2017 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 Transportation 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.

LLC “Russian Buses GAZ Group” is principally engaged in the
manufacturing of buses.

JSC “The Automobile Plant “URAL”” is principally engaged in producing
and selling automotive equipment.

Limited Liability Company RM-Terex is principally engaged in
manufacturing and selling equipment and machines for construction.

Limited Liability Company “KraMZ-Auto” is principally engaged in the
provision 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 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 of Hong
Kong Limited.

“connected person” 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 of Hong
Kong Limited.

“Mr. Deripaska” Mr. Oleg Deripaska, an executive Director.
“percentage ratios” the percentage ratios under Rule 14.07 of the Listing Rules.

“Previously Disclosed
Purchase of Assets Contracts”

the agreements between members of the Group and the associates of
Mr.
Deripaska/En+, pursuant to which the associates of Mr.
Deripaska/En+ agreed to
sell assets to members of the Group,
as disclosed in the announcements of the
Company dated 17
June 2016, 29 November 2016 and 30 December 2016.

“Previously Disclosed
Transportation Contracts”

the series of transportation contracts between members of the
Group and the
associates of En+, pursuant to which the
associates of En+ agreed to provide
transportation services
to members of the Group during the year ending 31
December
2017, as disclosed in the announcements of the Company dated 14
January
2015, 29 December 2015, 20 January 2016, 5 July 2016, 30 December
2016,
16 January 2017, 28 February 2017 and 7 July 2017.

“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

20 July 2017

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.
Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan Moldazhanova, Mr.
Daniel Lesin Wolfe, Ms. Olga Mashkovskaya, Ms. Ekaterina Nikitina and
Mr. Marco Musetti, 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.

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