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
TRANSACTIONSOPERATION OF ONDSKAYA HYDRO POWER
STATION
The Company announces that on 28 August 2014 and on 28 July
2015, JSC SUAL, a member of the Group, as the lessee, and
EuroSibEnergo — Thermal Energy, an associate of En+, as the lessor,
entered into the 2014 Lease and the 2015 Lease respectively.The
Company also announces that, on 4 December 2014 and on 28 July
2015, JSC SUAL, as the customer, and EuroSibEnergo — Thermal
Energy, as the contractor, entered into the 2014 Operation and
Maintenance Contract and the 2015 Operation and Maintenance
Contract respectively.
THE LEASES
The Company announces that, on 28 August 2014, JSC “Siberian and
Urals Aluminium Company” (“JSC SUAL”), a member of the
Group, as the lessee, and “EuroSibEnergo — Thermal Energy” Ltd
(“EuroSibEnergo — Thermal Energy”), an associate of En+, as
the lessor, entered into a lease pursuant to which the movable and
immovable property of Ondskaya Hydro Power Station is to be leased
to JSC SUAL for 11 months from the commencement of the operation
and maintenance services as referred to in the 2014 Operation and
Maintenance Contract (as defined below) (the “2014 Lease”)
.
The Company announces that, on 28 July 2015, JSC SUAL, as the
lessee, and EuroSibEnergo — Thermal Energy, as the lessor, entered
into a lease to extend the term of the 2014 Lease pursuant to which
the movable and immovable property of Ondskaya Hydro Power Station
is to be leased to JSC SUAL for a term up to 31 December 2015 (the
“2015 Lease”).
The key terms of the 2014 Lease and the 2015 Lease
(collectively, the “Leases”) are set out below:
2014 Lease 2015 Lease
Contracting
parties: JSC SUAL, as the lessee EuroSibEnergo — Thermal
Energy, as the lessor JSC SUAL, as the lessee EuroSibEnergo —
Thermal Energy, as the lessor
Subject matter of the lease:
Movable and immovable property of Ondskaya Hydro Power Station
Movable and immovable property of Ondskaya Hydro Power Station
Term: 11 months, with extension up to 3 years subject to
agreement between both parties and receipt of all necessary
approvals and authorisations Up to 31 December 2015
Rent:
For the financial year ended 31 December 2014: USD2,936,943 For the
financial year ending 31 December 2015: USD4,268,069 For the
financial year ending 31 December 2015: USD3,792,000
Terms of
payment: The rent is to be paid monthly and is to be settled in
cash via wire transfer The rent is to be paid monthly and is to be
settled in cash via wire transfer
THE OPERATION AND MAINTENANCE CONTRACTS
The Company announces that, on 4 December 2014, JSC SUAL, as the
customer, and EuroSibEnergo — Thermal Energy, as the contractor,
entered into a contract pursuant to which EuroSibEnergo — Thermal
Energy agreed to provide operation and maintenance services to JSC
SUAL in relation to the movable and immovable property of Ondskaya
Hydro Power Station (being the subject matter under the 2014 Lease)
for a term up to 21 September 2015 (the “2014 Operation and
Maintenance Contract”) for the estimated consideration of
approximately USD399,245 for the year ended 31 December 2014, and
approximately USD2,066,498 for the year ending 31 December 2015.
The term of the 2014 Operation and Maintenance Contract may be
extended up to three years subject to the agreement between both
parties and receipt of all necessary approvals and authorisations.
Under the 2014 Operation and Maintenance Contract, the
consideration is to be paid monthly in cash via wire transfer.
The Company announces that, on 28 July 2015, JSC SUAL, as the
customer, and EuroSibEnergo — Thermal Energy, as the contractor,
entered into a contract pursuant to which EuroSibEnergo — Thermal
Energy agreed to provide operation and maintenance services to JSC
SUAL in relation to the movable and immovable property of Ondskaya
Hydro Power Station (being the subject matter under the 2015 Lease)
for a term up to 31 December 2015 (the “2015 Operation and
Maintenance Contract”) for the estimated consideration of
approximately USD1,040,000 for the year ending 31 December 2015.
Under the 2015 Operation and Maintenance Contract, the
consideration is to be paid monthly in cash via wire transfer.
The 2014 Operation and Maintenance Contract and the 2015
Operation and Maintenance Contract are collectively referred to as
the “Operation and Maintenance Contracts”.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
The rent payable under the Leases and the consideration payable
under the Operation and Maintenance Contracts has been determined
with reference to the market price and on terms no less favourable
than those prevailing in the Russian market for the property and
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 Leases is the rent offered by
EuroSibEnergo — Thermal Energy, which is based on the property
taxes, cost of depreciation and cost of financing spent by the
lessor to acquire the property of Ondskaya Hydro Power Station. The
basis of calculation of payments under the Operation and
Maintenance Contracts is the contract price offered by
EuroSibEnergo — Thermal Energy, which is based on the cost of
operating Ondskaya Hydro Power Station in terms of the salaries,
maintenance and repair of equipment, service scheduling,
subcontractors and other general expenses.
Based on the terms of the Leases and the Operation and
Maintenance Contracts, the annual aggregate transaction amount that
was paid by the Group to EuroSibEnergo — Thermal Energy for the
financial year ended 31 December 2014 was approximately USD3.34
million, and the annual aggregate transaction amount that is
payable by the Group to EuroSibEnergo — Thermal Energy for the
financial year ending 31 December 2015 is estimated to be
approximately USD11.17 million.
The annual aggregate transaction amount is estimated by the
Directors based on the contract price under the Leases and the
Operation and Maintenance Contracts.
THE AGGREGATION APPROACH
Pursuant to Rule 14A.81 of the Listing Rules, the continuing
connected transactions contemplated under the Leases and the
Operation and Maintenance Contracts should be aggregated, as they
were entered into between the same parties, and the subject matter
of each of the contracts relates to each other.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The Directors consider that the Leases and the Operation and
Maintenance Contracts are for the benefit of the Company, as (i) a
branch of JSC SUAL (namely Nadvoitsy Aluminium Smelter) is supplied
with electricity from Ondskaya Hydro Power Station which is owned
by EuroSibEnergo — Thermal Energy and the Leases will allow the
electricity cost to be reduced; and (ii) EuroSibEnergo — Thermal
Energy possesses the necessary experience and expertise for the
operation and maintenance of hydro installations and power
generating equipment in Russia. Other alternative service provider
would require the Company to hire additional personnel and incur
costs on obtaining additional licences and permits which are not
currently available.
The Directors (including the independent non-executive
Directors) consider that the Leases and the Operation and
Maintenance 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 Leases and the Operation
and Maintenance 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 Leases and the Operation and
Maintenance Contracts, save for Mr. Deripaska, Mr. Vladislav
Soloviev, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan
Moldazhanova, who are directors of En+, being the holding company
of EuroSibEnergo — Thermal Energy. Mr. Deripaska is also indirectly
interested in more than 50% of the issued share capital of En+.
Accordingly, Mr. Deripaska, Mr. Vladislav Soloviev, Mr. Maxim
Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova did not
vote on the Board resolution approving the Leases and the Operation
and Maintenance Contracts.
LISTING RULES IMPLICATIONS
EuroSibEnergo — Thermal Energy 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 Leases and the
Operation and Maintenance Contracts for the financial year ending
31 December 2015 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 Leases and the Operation and Maintenance
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 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.
EuroSibEnergo — Thermal Energy is principally engaged in the
owning and operating power generating assets.
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. “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. By Order of the Board of Directors
of
United Company RUSAL PlcAby Wong Po YingCompany
Secretary
29 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