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)
UPDATE ON ALUMINIUM SALES CONTRACTS
Reference is made to the announcement of the Company dated 27
September 2011 in relation to, among other things, the Aluminium
Sales Contracts with Mr. Vekselberg’s Associates.
The Company would like to provide updated information in relation
to the Aluminium Sales Contracts with Mr. Vekselberg’s Associates
that, further to the contracts which were disclosed in the
Announcement, two more contracts were entered into between members
of the Group as sellers and the associates of Mr. Vekselberg.
Reference is made to the announcement of the Company dated 27 September
2011 in relation to, among other things, the proposed annual caps for
Aluminium Sales Contracts with Mr. Vekselberg’s Associates (the “Announcement”).
Unless otherwise specified, capitalized terms in this announcement have
the same meanings as those defined in the Announcement.
The Company would like to provide updated information in relation to the
Aluminium Sales Contracts with Mr. Vekselberg’s Associates that, further
to the contracts which were disclosed in the Announcement, two more
contracts were entered into between members of the Group as sellers and
the associates of Mr. Vekselberg.
ALUMINIUM SALES CONTRACT WITH OJSC KUZOTSM
The Company announces that on 18 May 2012, RUSAL TH, being a subsidiary
of the Company, as seller, entered into a contract with OJSC KUZOTSM,
being an associate of Mr. Vekselberg, as buyer, pursuant to which RUSAL
TH agreed to sell and OJSC KUZOTSM agreed to purchase aluminium products
in the estimated amount of approximately (i) 2,000 tonnes for the year
ending 31 December 2012, (ii) 2,800 tonnes for the year ending 31
December 2013 and (iii) 3,200 tonnes for the year ending 31 December
2014, at the estimated consideration of approximately (i) USD5 million
(net of VAT), (ii) USD7 million (net of VAT), and (iii) USD8 million
(net of VAT) respectively (the “Aluminium Sales Contract with OJSC
KUZOTSM”).
Under the Aluminium Sales Contract with OJSC KUZOTSM, the consideration
is to be pre-paid and is to be satisfied in cash via wire transfer. The
scheduled termination date for the contract is on 31 December 2014.
ALUMINIUM SALES CONTRACT WITH OJSC IRKUTSKKABEL
The Company announces that on 20 April 2012, Rusal Foil LLC, being a
subsidiary of the Company, as seller, entered into a contract with Open
Joint Stock Company “Irkutskkabel” (“OJSC Irkutskkabel”), being
an associate of Mr. Vekselberg, as buyer, pursuant to which Rusal Foil
LLC agreed to sell and OJSC Irkutskkabel agreed to purchase aluminium
products in the estimated amount of (i) 7 tonnes for the year ending 31
December 2012, and (ii) 3 tonnes for the three months ending 31 March
2013, at the estimated consideration of approximately (i) USD67,796 (net
of VAT), and (ii) USD16,949 (net of VAT), respectively (the “Aluminium
Sales Contract with OJSC Irkutskkabel”).
Under the Aluminium Sales Contract with OJSC Irkutskkabel, 50% of the
consideration is to be paid within 5 days from the date of the seller’s
notice that the aluminium products are ready for production, while the
balance is to be paid within 5 days from the date of the seller’s notice
that the aluminium products are ready for shipment. The consideration is
to be satisfied in cash via wire transfer. The scheduled termination
date for the contract is on 31 March 2013.
THE AGGREGATION APPROACH
Pursuant to Rule 14A.25 of the Listing Rules, the continuing connected
transactions contemplated under the Aluminium Sales Contract with OJSC
KUZOTSM and the Aluminium Sales Contract with OJSC Irkutskkabel will be
aggregated with the continuing connected transactions under the
Aluminium Sales Contracts with Mr. Vekselberg’s Associates as disclosed
in the Announcement, as they were entered into by the Group with the
associates of the same connected person, and the subject matters of each
of the agreements relate to the sale of aluminium products by members of
the Group.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Based on the terms of the Aluminium Sales Contract with OJSC KUZOTSM,
the Aluminium Sales Contract with OJSC Irkutskkabel and the Aluminium
Sales Contracts with Mr. Vekselberg’s Associates, the annual aggregate
transaction amount that is payable to the Group by the associates of Mr.
Vekselberg for the financial years ending 31 December 2012 and 31
December 2013 is estimated to be up to approximately USD330.07 million
and USD367.02 million, respectively.
This annual aggregate transaction amount is estimated by the Directors
based on the amount of aluminium products to be supplied and their
contract price under the Aluminium Sales Contracts.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The Directors consider that the transactions contemplated under the
Aluminium Sales Contract with OJSC KUZOTSM and the Aluminium Sales
Contract with OJSC Irkutskkabel are for the benefit of the Company,
given the price of the aluminium products supplied under these contracts
is based on the market price, and that the Aluminium Sales Contract with
OJSC KUZOTSM was in fact entered into pursuant to the Regulation of
Federal Antimonopoly Service of the Russian Federation (FAS). The
consideration payable under the Aluminium Sales Contract with OJSC
KUZOTSM and the Aluminium Sales Contract with OJSC Irkutskkabel has been
determined with reference to market price and on terms no less
favourable than those prevailing in the Russian market for aluminium
products of the same type and quality and those offered by members of
the Group to independent third parties.
The Directors (including the independent non-executive Directors)
consider that the Aluminium Sales Contract with OJSC KUZOTSM and the
Aluminium Sales Contract with OJSC Irkutskkabel have been negotiated on
normal commercial terms which are fair and reasonable and the
transactions contemplated under the Aluminium Sales Contract with OJSC
KUZOTSM and the Aluminium Sales Contract with OJSC Irkutskkabel 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 Aluminium Sales Contract with OJSC KUZOTSM and the
Aluminium Sales Contract with OJSC Irkutskkabel, save for Mr. Maksim
Goldman, who did not vote on the board resolutions to approve the
Aluminium Sales Contract with OJSC KUZOTSM and the Aluminium Sales
Contract with OJSC Irkutskkabel.
LISTING RULES IMPLICATIONS
Each of OJSC KUZOTSM and OJSC Irkutskkabel is indirectly owned by Mr.
Vekselberg as to more than 30%, and thus each of them is an associate of
Mr. Vekselberg. Accordingly, each of OJSC KUZOTSM and OJSC Irkutskkabel
is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the Aluminium Sales
Contract with OJSC KUZOTSM and the Aluminium Sales Contract with OJSC
Irkutskkabel constitute continuing connected transactions of the Company.
Mr. Vekselberg resigned as a non-executive director of the Company with
effect from 16 March 2012, and is a connected person of the Company
under Rule 14A.11(2) of the Listing Rules. It is expected that, Mr.
Vekselberg will cease to be a connected person after 12 months from 16
March 2012, in which case associates of Mr. Vekselberg including OJSC
KUMZ, OJSC Khimprom, OJSC KUZOTSM and OJSC Irkutskkabel will also cease
to be connected persons of the Company.
The estimated annual aggregate transaction amount of the continuing
connected transactions under the Aluminium Sales Contract with OJSC
KUZOTSM, the Aluminium Sales Contract with OJSC Irkutskkabel and the
Aluminium Sales Contracts with Mr. Vekselberg’s Associates for the
financial years ending 31 December 2012 and 31 December 2013 is more
than 0.1% but less than 5% under the applicable percentage ratios (other
than the profits ratio). Accordingly, pursuant to Rule 14A.34 of the
Listing Rules, the transactions contemplated under these agreements are
only subject to the reporting and announcement requirements set out in
Rules 14A.45 to 14A.47, the annual review requirements set out in Rules
14A.37 to 14A.40 and the requirements set out in Rules 14A.35(1) and
14A.35(2) of the Listing Rules. These transactions are exempt from the
independent shareholders’ approval requirements under Chapter 14A of the
Listing Rules.
Details of the Aluminium Sales Contract with OJSC KUZOTSM, the Aluminium
Sales Contract with OJSC Irkutskkabel and the Aluminium Sales Contracts
with Mr. Vekselberg’s Associates will be included in the relevant annual
report and accounts of the Company in accordance with Rule 14A.46 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. Spread across 19 countries
in five continents, the operations and offices of the Company employ
more than 72,000 people.
OJSC KUZOTSM is principally engaged in the production of round mill
products from copper, nickel, zinc and alloys on their basis.
OJSC Irkutskkabel is principally engaged in the production of cable
materials.
DEFINITIONS
In this announcement, the following expressions have the following
meanings, unless the context otherwise requires:
“associate”
has the same meaning ascribed thereto under the Listing Rules.
“Board”
the board of Directors of the Company.
“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”
has the same meaning ascribed thereto under the Listing Rules.
“continuing connected transaction”
has the same meaning ascribed thereto under the Listing Rules.
“Director(s)”
the director(s) 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. Vekselberg”
Mr. Victor Vekselberg, whose resignation as a non-executive director
of the Company took effect on 16 March 2012.
“percentage ratios”
the percentage ratios under Rule 14.07 of the Listing Rules.
“RUSAL TH”
Open Joint Stock Company “United Company RUSAL Trading House”, an
indirect wholly-owned subsidiary of the Company.
“Stock Exchange”
The Stock Exchange of Hong Kong Limited.
“USD”
United States dollars, the lawful currency of the United States of
America.
By Order of Board of Director ofUnited Company RUSAL Plc
Vladislav SolovievDirector
21 May 2012
As at the date of this announcement, the executive Directors are Mr.
Oleg Deripaska, Mr. Vladislav Soloviev, Mr. Alexander Livshits, Ms. Vera
Kurochkina, Mr. Maxim Sokov and Mr. Petr Sinshinov, the non-executive
Directors are Mr. Maksim Goldman, Mr. Dmitry Afanasiev, Mr. Len
Blavatnik, Mr. Ivan Glasenberg, Mr. Dmitry Razumov, Mr. Anatoly
Tikhonov, Mr. Artem Volynets and Mr. Dmitry Yudin, and the independent
non-executive Directors are Dr. Peter Nigel Kenny, Mr. Philip Lader, Mr.
Barry Cheung Chun-yuen (Chairman) and Ms. Elsie Leung Oi-sie.
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
and http://www.rusal.ru/en/press-center/press-releases.aspx,
respectively.
