United Company RUSAL Plc: Continuing Connected Transactions Repair Services

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 TRANSACTIONS
REPAIR SERVICES

THE REPAIR SERVICES CONTRACTS

The Company announces that members of the Group, entered into contracts with the associates of En+, pursuant to which the associates of En+ agreed to provide repair services to members of the Group (the "Repair Services Contracts”), details of which are set out below.

Note

1: The estimated consideration payable for the year ending 31 December 2016 and 31 December 2017 is approximately USD11,842 (net of VAT) and USD12,726 (net of VAT) respectively.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

The contract price payable under the Repair Services Contracts has been determined with reference to the market price and on terms no less favourable than those prevailing in the Russian market for repair 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 Repair Services Contracts is the price of contracts offered by the associates of En+ which is based on the estimated cost (including labour cost and the necessary materials) for the relevant repair works. Except for contracts no. 17 and 18 set out in the table above, the Company invited several organizations to take part in the tender in relation to the relevant required repair services and chose the contractors offering the best terms and conditions (taking into account the price and quality offered by those contractors) and then entered into contracts with the chosen contractors. As to contracts no. 17 and 18, IESK is the monopolist in the relevant distribution grid maintenance area. The calculation of consideration under contracts no. 17 and 18 is based on the Order of the Ministry of Power Industry and Electrification No. 51 dated 26 January 1987 and the list of equipment to be serviced.

Based on the terms of the Repair Services Contracts, the annual aggregate transaction amount that is payable by the Group to the associates of En+ for the financial year ending 31 December 2015 is estimated to be approximately USD13.1 million.

The annual aggregate transaction amount is estimated by the Directors based on the amount of repair services to be received and their contract price.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the Repair Services Contracts should be aggregated, as they were entered into by the Group with the associates of the same group of connected persons who are parties connected or otherwise associated with one another, and the subject matter of each of the contracts relates to the receipt of repair and maintenance services by members of the Group.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the Repair Services Contracts are for the benefit of the Company, as the contractors offered a competitive price.

The Directors (including the independent non-executive Directors) consider that the Repair Services 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 Repair Services 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 Repair Services 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 Bratskenergoremont, Khakass Utility Systems LLC, KraMZ-Auto, LLC KraMZ, Irkutskenergoremont JSC, OVE and IESK. 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 Repair Services Contracts.

LISTING RULES IMPLICATIONS

Each of Bratskenergoremont, Khakass Utility Systems LLC, KraMZ-Auto, LLC KraMZ, Irkutskenergoremont JSC, OVE and IESK 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 Repair Services 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 the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Details of the Repair Services Contracts 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.

Bratskenergoremont is principally engaged in activities for supporting of operability of the equipment, production of electric installation, all-construction works and others.

Khakass Utility Systems LLC is principally engaged in generating heat and electricity.

KraMZ-Auto is principally engaged in the provision of transportation services.

LLC KraMZ is principally engaged in metallurgy.

Irkutskenergoremont JSC is principally engaged in activities for supporting of operability of thermal power plants.

OVE is principally engaged in the provision of transportation services and railway transport.

IESK is principally engaged in transmission and distribution of electricity.

DEFINITIONS

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

2 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, 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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150701006429/en/