United Company RUSAL Plc: Continuing Connected Transactions Purchase of Raw Materials for Production

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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
PURCHASE OF RAW MATERIALS FOR PRODUCTION

ADDENDUM TO THE PURCHASE OF CALCINED PETROLEUM COKE AGREEMENT

The Company announces that on 15 November 2016, a member of the Group, UC RUSAL TH, as buyer, entered into an addendum to the purchase of calcined petroleum coke agreement dated 1 April 2016 with Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant”, an associate of Mr. Blavatnik, as seller, pursuant to which UC RUSAL TH agreed to purchase and Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant” agreed to supply calcined petroleum coke for production in the estimated amount of 70,000 tons (+/- 10%) for an estimated total consideration of approximately USD13,648,251 (the "Addendum to the Purchase of Calcined Petroleum Coke Agreement”). The payment of the consideration is to be made upon delivery within 3 calendar days from the date of receipt of the invoice for the goods shipped and is to be satisfied in cash via wire transfer. The scheduled termination date of the addendum is 31 December 2017.

ADDITIONAL PURCHASE OF GRAPHITIZED ELECTRODE AGREEMENT

The Company announces that on 15 November 2016, a member of the Group, UC RUSAL TH, as buyer, entered into a supplementary agreement no. 3 to annex 6 dated 19 January 2016 to the original contract dated 18 June 2013, pursuant to which UC RUSAL TH agreed to purchase and Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant” agreed to supply graphitized electrodes for production in the estimated amount of 198 tons for an estimated total consideration of approximately USD361,820 (the "Additional Purchase of Graphitized Electrodes Agreement”). The payment of the consideration is to be made upon delivery within 30 calendar days and is to be satisfied in cash via wire transfer. The scheduled termination date of the supplementary agreement is 31 December 2016.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

The annual aggregate transaction amount that is payable by the Group to the associates of Mr. Blavatnik under the Additional Purchase of Graphitized Electrodes Agreement and the Previously Disclosed Purchase of Raw Materials Agreements for Production for the financial year ending 31 December 2016 is estimated to be approximately USD27.73 million.

The annual aggregate transaction amount that is payable by the Group to the associates of Mr. Blavatnik under the Addendum to the Purchase of Calcined Petroleum Coke Agreement for the financial year ending 31 December 2017 is estimated to be approximately USD13.65 million.

The 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 Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement is calculated by multiplying the price per ton by the volume.

Under the Addendum to the Purchase of Calcined Petroleum Coke Agreement, the relevant price per ton of the calcined petroleum coke is up to USD177.25.

Under the Additional Purchase of Graphitized Electrodes Agreement, the relevant price per ton of the graphitized electrodes ranges from approximately USD1,377 to USD1,827.

The consideration 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 seller offered the lowest price and its products meet the Group’s specifications for production and are satisfactory in terms of quality and quantity. Accordingly, the Addendum to the Purchase of Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement were entered into.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the Addendum to the Purchase of Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement are for the benefit of the Company, as the seller offered a competitive price and the raw materials to be supplied by the seller meets the technical specification for the Group’s production.

The Directors (including the independent non-executive Directors) consider that the Addendum to the Purchase of Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement 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 Addendum to the Purchase of Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement 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 have a material interest in the transactions contemplated by the Addendum to the Purchase of Calcined Petroleum Coke Agreement or the Additional Purchase of Graphitized Electrodes Agreement, save for Mr. Blavatnik, a former non-executive Director, who is interested in more than 30% in Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant”.

LISTING RULES IMPLICATIONS

Mr. Blavatnik, a former non-executive Director, indirectly holds more than 30% of the issued share capital of Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant”. Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant” is therefore an associate of Mr. Blavatnik and hence a connected person of the Company under the Listing Rules.

Accordingly, the transactions contemplated under the Addendum to the Purchase of Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount of the continuing connected transactions under the Additional Purchase of Graphitized Electrodes Agreement for the financial year ending 31 December 2016 and the Addendum to the Purchase of Calcined Petroleum Coke Agreement for the financial year ending 31 December 2017 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 the addendum is 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 Calcined Petroleum Coke Agreement and the Additional Purchase of Graphitized Electrodes Agreement 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 and sale of aluminium, including alloys and value-added products, and alumina.

Closed Joint Stock Company "ENERGOPROM — Novosibirsk Electrode Plant” is principally engaged in the production of graphite electrodes, carbon electrodes, cathode blocks, calcined petroleum coke and electrode paste.

DEFINITIONS

In this announcement, the following expressions have the following meanings, unless the context otherwise requires:

16 November 2016

As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Mr. Vladislav Soloviev and Mr. Siegfried Wolf, the non-executive Directors are Mr. Maxim Sokov, Mr. Dmitry Afanasiev, 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), Mr. Philip Lader, Dr. Elsie Leung Oi-sie, Mr. Mark Garber, Mr. Dmitry Vasiliev and Mr. Bernard Zonneveld.

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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