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, INTERNATIONAL
PUBLIC JOINT-STOCK COMPANY
(Incorporated under the laws of Jersey with limited liability and continued in the
Russian Federation as an international company)
(Stock Code: 486)
CONTINUING CONNECTED TRANSACTIONS
REPAIR SERVICES CONTRACT
Reference is made to the announcements of the Company dated 15 May 2020, 15 January 2021, 25 January 2021, 23 March 2021 and 1 April 2021 in relation to the Previously Disclosed Repair Services Contracts.
The Company further announces that the member of the Group has entered into the contract with the associate of En+, pursuant to which the associate of En+ agreed to supply repair services to the member of the Group (the "New Repair Services Contract").
THE NEW REPAIR SERVICES CONTRACT
Reference is made to the announcements of the Company dated 15 May 2020, 15 January 2021, 25 January 2021, 23 March 2021 and 1 April 2021 in relation to the Previously Disclosed Repair Services Contracts. The Company announces that the member of the Group has entered into the contract with the associate of En+, pursuant to which the associate of En+ agreed to provide repair services to the member of the Group (the "New Repair Services Contract"), with details as below.
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Estimated | |||||||
consideration | |||||||
payable for the | |||||||
year ending 31 | |||||||
Date of | Customer | December 2021 | Scheduled | ||||
the | (member of | Contractor | excluding VAT | termination | |||
contract | the Group) | (associate of En+) | Repair services | (USD) | date | Payment terms | |
1 | 19 April | Limited Liability | KraMZ Ltd. | Equipment | 48,629 | Up to 31 | 100% of the |
2021 | Company «Casting | repair services | (Note1) | December | consideration to | ||
and mechanical | (in respect of | 2021 | be paid within 30 | ||||
plant «SKAD» | melting furnace | days from the date | |||||
inductors and | of signature of the | ||||||
cable-hoses) | certificate of | ||||||
acceptance | |||||||
Total | 48,629 | ||||||
estimated |
consideration
payable
(USD)
Note:
1. The estimated consideration payable is calculated based on the estimated costs of repair works (USD 27.33 per man-hour excluding VAT based on the estimated amount of 418 man-hours required to repair one inductor and USD 29.35 per man-hour excluding VAT based on the estimated amount of 10 man-hours required to repair one cable-hose) and is to be settled in cash via bank transfer.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
The contract price payable under the New Repair Services 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 repair services of the same type and quality and those offered by the associates of En+ to independent third parties.
Based on the terms of the New Repair Services Contract and the Previously Disclosed Repair Services Contracts, the annual aggregate transaction amount that is payable by the Group to the associate of En+ for the financial year ended 31 December 2021 is estimated to be approximately USD 12.734 million.
In accordance with the Company's procurement policies and using tools such as the Company's procurement portal, the Company invited several organizations to take part in the tender in relation to the required repair services. The Company's procurement managers, in line with the best-in-class experience and know-how of the Company's procurement policies, chose the contractor offering the best terms and conditions (the contractor offered the lowest price, has highly-skilled personnel, currently carries out similar works, previously worked with the contractor or have experience of similar works) and then entered into the contract with the chosen contractor.
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The annual aggregate transaction amount payable by the Group 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 New Repair Services Contract and the Previously Disclosed Repair Services Contract 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 New Repair Services Contract is for the benefit of the Company, as the contractor offered a competitive price.
The Directors (including the independent non-executive Directors) consider that the New Repair Services 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 Repair Services Contract is 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 Repair Services Contract, save for Mr. Vyacheslav Solomin, who is the chief operating officer of International limited liability company En+ Holding, a company which is owned by En+, and deputy CEO - executive officer of Moscow Branch of International limited liability company En+ Holding, and Mr. Vladimir Kolmogorov, who is the first deputy chief executive officer for technical policy and executive officer of International limited liability company En+ Holding, and deputy CEO - executive officer of En+, being the holding company of KraMZ Ltd. Mr. Vladimir Kolmogorov is also the head of technical supervision of JSC EuroSibEnergo, a company which is owned by En+. Accordingly, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov did not vote on the Board resolution approving the New Repair Services Contract.
LISTING RULES IMPLICATIONS
The ultimate beneficial owner of KraMZ Ltd. is En+, which holds more than 90% of the issued share capital of this entity.
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KraMZ Ltd. is an indirect subsidiary of En+, and is therefore an associate of En+ which in turn is a substantial shareholder of the Company. Accordingly, KraMZ Ltd. is a connected person of the Company under the Listing Rules.
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Repair Services Contract and the Previously Disclosed Repair Services Contracts for the financial year ending 31 December 2021 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 New Repair Services Contract and the Previously Disclosed Repair Services 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.
KraMZ Ltd. is principally engaged in aluminium processing.
En+ is a leading international vertically integrated aluminium and hydropower producer.
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, international public |
joint-stock company, incorporated under the laws | |
of Jersey with limited liability and continued in the | |
Russian Federation as an international company, | |
the shares of which are listed on the Main Board of | |
the Stock Exchange of Hong Kong Limited. |
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"connected person(s)" | has the same meaning ascribed thereto under the |
Listing Rules. | |
"continuing connected | has the same meaning ascribed thereto under the |
transactions" | Listing Rules. |
"Director(s)" | the member of the Board of directors of the |
Company. | |
"En+" | EN+ GROUP International public joint-stock |
company, a company registered in accordance with | |
the procedure established by the laws of the | |
Russian Federation, in accordance with the Federal | |
Law of the Russian Federation "On International | |
Companies", and which is a 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. | |
"percentage ratios" | the percentage ratios under Rule 14.07 of the |
Listing Rules. | |
"Previously Disclosed | the repair services contracts between members of |
Repair Services | the Group and the associates of En+, pursuant to |
Contracts" | which the associates of En+ agreed to provide |
repair services to members of the Group, as | |
disclosed in the announcements of the Company | |
dated 15 May 2020, 15 January 2021, 25 January | |
2021, 23 March 2021 and 1 April 2021. | |
"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 virtue of the power of attorney on behalf of | |
United Company RUSAL, | |
international public joint-stock company | |
Aby Wong Po Ying | |
Company Secretary | |
20 April 2021 |
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As at the date of this announcement, the members of the Board of Directors are the following: the executive Directors are Mr. Evgenii Nikitin, Mr. Evgeny Kuryanov and Mr. Evgenii Vavilov, the non-executive Directors are Mr. Marco Musetti, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov and the independent non-executive Directors are Dr. Elsie Leung Oi-sie, Mr. Dmitry Vasiliev, Mr. Bernard Zonneveld (Chairman), Dr. Evgeny Shvarts, Mr. Randolph N. Reynolds, Mr. Kevin Parker, Mr. Christopher Burnham and Mr. Nick Jordan.
All announcements published by the Company are available on its website under the links http://www.rusal.ru/en/investors/info.aspx and http://rusal.ru/investors/info/moex/ , respectively.
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United Company RUSAL plc published this content on 20 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 April 2021 05:27:02 UTC.