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
REPAIR SERVICES

 

Reference is made to the announcement of the Company dated 2 July 2015 in relation to the
Previously Disclosed Repair Services Contracts.

The Company announces that members of the Group entered into contracts / additional agreements
with associates of En+, pursuant to which the associates of En+ agreed to provide repair services to
the members of the Group.

THE REPAIR SERVICES CONTRACTS

Reference is made to the announcement of the Company dated 2 July 2015 in relation to the Previously Disclosed Repair Services Contracts.

The Company announces that members of the Group entered into contracts / additional agreements with associates of En+, pursuant to which the associates of En+ agreed to provide repair services to the members of the Group (the “Repair Services Contracts”), details of which are set out below.

No.  

Date of
contract/
additional
agreement

  

Customer
(member of the Group)

  

Contractor
(associate of En+)

 

 

Term of
contract/
additional
agreement

  

Repair
services

  

Estimated
consideration
payable for the
year ending 31
December 2017
excluding VAT
(USD)

   Payment terms
1.  

Contract dated
23 January 2017

 

JSC RUSAL
Achinsk

  Bratskenergoremont  

Up to 31
December 2017,
may be extended
by an addendum

 

Maintenance
services of CHP
equipment

 

5,795,899
(Note 1)

 

 

A prepayment of
50% of the
consideration shall be paid
according to the
monthly
financial
schedule set out
in the contract
until the 5th day
of the month, the
remaining 50%
to be paid within
10 calendar days
after receiving
of the original
invoice

2.  

Additional

agreement dated
28 December
2016, which is
an additional
agreement to the
contract dated 4
July 2016

 

JSC RUSAL
Achinsk

  Bratskenergoremont  

Up to 30 June

2017

 

Capital repair of
boiler

  536,421  

A prepayment of
50% of the
consideration
shall be paid
according to the
monthly
financial
schedule set out
in the contract
until the 5th day
of the month, the
remaining 50%
to be paid within
10 calendar days

after
receiving
of the original
invoice

3.  

Contract dated
28 December
2016

 

JSC RUSAL
Achinsk

  Bratskenergoremont  

Up to 31
December
2017

 

Technological
cleaning of
boiler

  150,539  

Within 15
calendar days
after receipt of
the original
invoice

4.  

Contract dated
23 January 2017

 

JSC RUSAL
Achinsk

  Bratskenergoremont  

Up to 30 June
2017

 

Extra work
during the
overhaul of
boiler

  660,044  

A prepayment of
50% of the
consideration shall be paid
according to the
monthly
financial schedule set out
in the contract
until the 5th day
of the month, the
remaining 50%
to be paid within
10 calendar days
after receiving
of the original
invoice

5.  

Contract dated
10 January 2017

 

Open
Joint-Stock
Company
“RUSAL Bratsk
Aluminium
Smelter”

 

Joint-Stock Company
“Irkutskenergoremont”

 

Up to 31
December
2017

 

Production
equipment
maintenance and
repair works

 

1,303,891
(Note 2)

 

 

Within 40
calendar days
after the signing
of the Performed Works
Certificate based
n the invoice

6.  

Contract dated
10 January 2017

 

Limited Liability
Company
“Russian
Engineering
Company

 

Joint-Stock Company
“Irkutskenergoremont”

 

Up to 31
December 2017

 

Production
equipment
maintenance and
repair works

 

627,638
(Note 3)

 

 

Within 40
Calendar days
after the signing
of the Performed
Works Certificate based
on the invoice

   

Total estimated
consideration
payable for the
year 2017

                   9,074,432    

Notes:

1. The estimated consideration payable is calculated on the basis of labour cost which is estimated at USD8.48 per hour (excluding VAT).

2. The estimated consideration payable is calculated on the basis of labour cost which ranges from USD3.38 to USD3.99 per hour (excluding VAT).

3. The estimated consideration payable is calculated on the basis of labour cost which ranges from USD3.38 to USD3.99 per hour (excluding VAT).

The consideration under the Repair Services Contracts is to be paid in cash via wire transfer or set-off.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

The contract price payable under the Repair Services Contracts has been determined with reference to the market price and on terms no less favourable than those prevailing in the Russian market for repair 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 Repair Services Contracts is the price of contract offered by the associates of En+ which is based on the estimated costs (including labour costs and the necessary materials) for the relevant repair works. The Company invited several organizations to take part in the tender in relation to the required repair services and chose the contractor offering the best terms and conditions (taking into account the price, quality offered by the contractor and availability of professionals with the required skill and experience) and then entered into the contract/additional agreement with the chosen contractor.

Based on the terms of the Repair Services Contracts and the Previously Disclosed Repair Services Contracts, the annual aggregate transaction amount that is payable by the Group to the associates of En+ for the financial year ending 31 December 2017 is estimated to be approximately USD9.088 million.

The annual aggregate transaction amount is estimated by the Directors based on the amount of repair services to be received and the contract price.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the Repair Services Contracts and the Previously Disclosed Repair Services Contracts should be aggregated, as they were entered into by the Group with the associates of the same group of connected persons who are parties connected or otherwise associated with one another, and the subject matter of each of the contracts relates to the receipt of repair and maintenance services by members of the Group.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the Repair Services Contracts are for the benefit of the Company, as the contractor offered a competitive price.

The Directors (including the independent non-executive Directors) consider that the Repair Services Contracts have been negotiated on an arm’s length basis and on normal commercial terms which are fair and reasonable and the transactions contemplated under the Repair Services 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 Repair Services Contracts, save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of each of Bratskenergoremont and Joint-Stock Company “Irkutskenergoremont”. 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 Repair Services Contracts.

LISTING RULES IMPLICATIONS

Each of Bratskenergoremont and Joint-Stock Company “Irkutskenergoremont” is directly or indirectly held by En+ as to more than 30% of the issued share capital and is therefore an associate of En+ which is a substantial shareholder of the Company and thus is a connected person of the Company under the Listing Rules.

The estimated annual aggregate transaction amount of the continuing connected transactions under the Repair Services Contracts and the Previously Disclosed Repair Services 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 the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Details of the Repair Services Contracts and the Previously Disclosed Repair 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 and sale of aluminium, including alloys and value-added products, and alumina.

Bratskenergoremont is principally engaged in activities for supporting of operability of the equipment, production of electric installation, all-construction works and others.

Joint-Stock Company “Irkutskenergoremont” is principally engaged in activities for supporting of operability of thermal power plants.

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.
“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 Repair Services
Contracts”

the repair services contracts between members of the
Group and associates of En+, pursuant to which the
associates of En+ agreed to provide repair services to
members of the Group during the year 2017, as disclosed
in the announcement of the Company dated 2 July 2015.

“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

24 January 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/hkse/, http://rusal.ru/investors/info/moex/ and http://www.rusal.ru/en/press-center/press-releases.aspx , respectively.