United Company RUSAL Plc: Continuing Connected Transactions Operation of Ondskaya Hydro Power Station

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United Company Rusal Plc (Paris:RUSAL) (Paris:RUAL):

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UNITED COMPANY RUSAL PLC
(Incorporated under the laws of Jersey with limited liability)
(Stock Code: 486)

CONTINUING CONNECTED TRANSACTIONS
OPERATION OF ONDSKAYA HYDRO POWER STATION

THE 2016 LEASE

The Company announces that, on 15 December 2015, 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 supplemental agreement to the lease dated 28 August 2014 (as disclosed in the Company’s announcement dated 29 July 2015) pursuant to which the movable and immovable property of Ondskaya Hydro Power Station is to be leased to JSC SUAL for 11 months from 1 January 2016 to 30 November 2016 (the "2016 Lease”).

The key terms of the 2016 Lease are set out below:

THE 2016 OPERATION AND MAINTENANCE CONTRACT

The Company announces that, on 15 December 2015, JSC SUAL, as the customer, and EuroSibEnergo — Thermal Energy, as the contractor, entered into a supplemental agreement to the contract dated 4 December 2014 (as disclosed in the Company’s announcement dated 29 July 2015) 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 2016 Lease) for a term which is the same term as the 2016 Lease (the "2016 Operation and Maintenance Contract”) for the estimated consideration of approximately USD4,080,000 for the financial year ending 31 December 2016. Under the 2016 Operation and Maintenance Contract, the consideration is to be paid as to 50% by the 30th day of the current month and the remaining 50% within 10 calendar days from the date of signing of bilateral act of acceptance of services rendered and in cash via wire transfer.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

Each of the rent payable under the 2016 Lease and the consideration payable under the 2016 Operation and Maintenance Contract 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 2016 Lease 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 2016 Operation and Maintenance Contract 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 2016 Lease and the 2016 Operation and Maintenance Contract, the annual aggregate transaction amount that to be paid by the Group to EuroSibEnergo — Thermal Energy for the financial year ended 31 December 2016 will be approximately USD10.5 million.

The annual aggregate transaction amount is estimated by the Directors based on the contract price under the 2016 Lease and the 2016 Operation and Maintenance Contract.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the 2016 Lease and the 2016 Operation and Maintenance Contract 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 2016 Lease and the 2016 Operation and Maintenance Contract 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 2016 Lease 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 2016 Lease and the 2016 Operation and Maintenance Contract 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 2016 Lease and the 2016 Operation and Maintenance Contract 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 2016 Lease and the 2016 Operation and Maintenance Contract, save for Mr. Deripaska, 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. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova did not vote on the Board resolution approving the 2016 Lease and the 2016 Operation and Maintenance Contract.

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 2016 Lease and the 2016 Operation and Maintenance Contract for the financial year ending 31 December 2016 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 2016 Lease and the 2016 Operation and Maintenance Contract 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:

16 December 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, 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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