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
TRANSACTIONSPURCHASE OF RAW MATERIALS FOR PRODUCTION
The Company announces that on 7 July 2015, UC RUSAL TH, as
buyer, entered into the Addendum to the Purchase of Raw Materials
Agreement with Doncarb Graphite.
Reference is made to the announcements of the Company dated 30
December 2014 and 3 July 2015 in relation to certain continuing
connected transactions regarding the purchase of raw materials for
production between UC RUSAL TH and the associates of Mr. Blavatnik,
pursuant to which the associates of Mr. Blavatnik agreed to supply
raw materials for production to UC RUSAL TH.
ADDENDUM TO THE PURCHASE OF RAW MATERIALS AGREEMENT WITH
DONCARB GRAPHITE
Reference is made to the announcement of the Company dated 30
December 2014 in relation to, among other things, the purchase of
raw materials agreement with Doncarb Graphite Limited Liability
Company (“Doncarb Graphite”) dated 28 November 2014.
The Company announces that on 7 July 2015, UC RUSAL TH, as
buyer, entered into an addendum to the above-mentioned purchase of
raw materials agreement with Doncarb Graphite, an associate of Mr.
Blavatnik, as seller, pursuant to which UC RUSAL TH agreed to
purchase and Doncarb Graphite agreed to supply graphitized
electrodes in the estimated amount of 83 tons for the year ending
31 December 2015, for an estimated total consideration of
approximately USD171,810 (the “Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite”). The term of the
addendum is up to 31 December 2015.
Under the Addendum to the Purchase of Raw Materials Agreement
with Doncarb Graphite, the payment of the consideration is to be
made upon delivery and is to be satisfied in cash via wire
transfer.
THE AGGREGATION APPROACH
Pursuant to Rule 14A.81 of the Listing Rules, the continuing
connected transactions under the Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite are required to be
aggregated with the Previously Disclosed Purchase of Raw Materials
Agreements, as they were entered into by the Group with the
associates of the same connected persons or with parties connected
or otherwise associated with one another, and the subject matter of
each of the contracts relates to the purchase of raw materials by
members of the Group for the purpose of the Group’s production.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Based on the terms of the Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite and the Previously
Disclosed Purchase of Raw Materials Agreements, the annual
aggregate transaction amount that is payable by the Group to the
associates of Mr. Blavatnik for the financial year ending 31
December 2015 is estimated to be up to approximately USD29.837
million.
This annual aggregate transaction amount is estimated by the
Directors based on the amount of raw materials to be supplied for
the purpose of the Group’s production and their contract price.
The consideration payable under the Addendum to the Purchase of
Raw Materials Agreement with Doncarb Graphite is calculated by
multiplying the price per ton by the volume.
Under the Addendum to the Purchase of Raw Materials Agreement
with Doncarb Graphite, the relevant price per ton of the
graphitized electrodes is approximately USD2,070.
The consideration (which is based on the unit price and the
volume) has been arrived at after arm’s length negotiation by
reference to 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
purchase of the electrodes and chose the sellers offering the best
terms and conditions (taking into account the price and quality
offered by those sellers and the proximity of the sellers) and then
entered into agreements with the chosen sellers. Accordingly, the
Addendum to the Purchase of Raw Materials Agreement with Doncarb
Graphite was entered into.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The Directors consider that the Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite is for the benefit of the
Company, as the seller offered a competitive price and is in close
proximity for convenient delivery, and the raw materials to be
supplied by the seller meet the technical specification for the
Group’s production.
The Directors (including the independent non-executive
Directors) consider that the Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite 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 Addendum
to the Purchase of Raw Materials Agreement with Doncarb Graphite
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 Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite, save for Mr. Blavatnik,
a non-executive Director, who is interested in more than 30% in
Doncarb Graphite. Accordingly, Mr. Blavatnik did not vote on the
Board resolutions approving the Addendum to the Purchase of Raw
Materials Agreement with Doncarb Graphite.
LISTING RULES IMPLICATIONS
Mr. Blavatnik indirectly holds more than 30% of the issued share
capital of Doncarb Graphite. Doncarb Graphite is therefore an
associate of Mr. Blavatnik, a non-executive Director, and hence a
connected person of the Company under the Listing Rules.
The annual aggregate transaction amount for the financial year
ending 31 December 2015 of the continuing connected transactions
under the Addendum to the Purchase of Raw Materials Agreement with
Doncarb Graphite and the Previously Disclosed Purchase of Raw
Materials Agreements 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
agreements 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 Addendum to the Purchase of Raw Materials
Agreement with Doncarb Graphite and the Previously Disclosed
Purchase of Raw Materials Agreements 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 of
aluminium and alumina. The Company’s assets include bauxite and
nepheline ore mines, alumina refineries, aluminium smelters,
casthouse business for alloys production, aluminium foil mills and
production of aluminium packaging materials as well as
power-generating assets.
Doncarb Graphite is principally engaged in the production of
graphite products and spare parts.
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
transaction(s)” has the same meaning ascribed thereto under the
Listing Rules. “Group” the Company and its subsidiaries. “Listing
Rules” the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited. “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 Agreements” the
agreements/addendums/additional agreements entered into between UC
RUSAL TH as buyer and the associates of Mr. Blavatnik as sellers in
relation to the purchase of raw materials for the year ending 31
December 2015 for the purpose of the Group’s production, as
previously disclosed in the Company’s announcements dated 30
December 2014 and 3 July 2015. “Stock Exchange” The Stock Exchange
of Hong Kong Limited. “UC RUSAL TH” Open Joint Stock Company
“United Company RUSAL -Trading House”, a company incorporated in
the Russian Federation and an indirect wholly-owned subsidiary of
the Company. “USD” United States dollars, the lawful currency of
the United States of America.
By Order of the Board of Directors ofUnited
Company RUSAL Plc Aby Wong Po YingCompany Secretary
8 July 2015
As at the date of this announcement, the executive Directors are
Mr. Oleg Deripaska, Mr. Vladislav Soloviev and Mr. Stalbek
Mishakov, 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), Dr. Peter Nigel Kenny, Mr. Philip Lader, Ms. Elsie
Leung Oi-sie and Mr. Mark Garber and Mr. Dmitry Vasiliev.
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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United Company RUSAL Plc