United Company RUSAL Plc: Continuing Connected Transactions Sale of Raw Materials

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
SALE OF RAW MATERIALS

Reference is made to the announcements of the Company dated 18 December 2015 and 30 December 2015 in relation to the Previously Disclosed Raw Materials Supply Contracts.

The Company announces that a member of the Group, as seller, has entered into the New 2016 Raw Materials Supply Contract with an associate of En+, as buyer.

THE NEW 2016 RAW MATERIALS SUPPLY CONTRACT

The Company announces that a member of the Group, as seller, has entered into the following raw materials supply contract with an associate of En+, as buyer, with particulars set out below (the "New 2016 Raw Materials Supply Contract”):

Notes:

1. The contract is an addendum to the contract dated 2 September 2015 as disclosed in the Company’s announcement dated 4 September 2015.

2. The contract price is linked to the price of aluminium on the LME plus a premium (USD1,620) calculated on a monthly basis and in accordance with the rules prescribed by the Federal Antimonopoly Service (a Russian governmental authority) which are applicable to the sale and purchase of the relevant kinds of raw materials regardless of whether the counterparties are independent third parties or connected persons in comparable circumstances. The price of aluminium on the LME is the average aluminum price quoted at the LME within a one-month period preceding the month of shipment.

The consideration is to be satisfied in cash via wire transfer and the scheduled termination date is 31 December 2016. The contract may be extended for next calendar year if neither party declares its intention to terminate the contract in writing prior to the expiry of the contract.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions under the New 2016 Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts should be aggregated, as they were entered into by the Group with the associates of the same connected persons or with parties connected or otherwise associated with one another, and the subject matter of each of the contracts relates to the supply of raw materials by the Group.

The annual aggregate transaction amount payable under the New 2016 Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts is estimated to be approximately USD13.893 million for the year ending 31 December 2016.

The consideration payable under the New 2016 Raw Materials Supply Contract is calculated by multiplying the unit price by the volume. The unit price of the relevant raw material is set out in the note to the table above.

The consideration payable under the under the New 2016 Raw Materials Supply Contract 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 members of the Group to independent third parties customers. The annual aggregate amount is the maximum amount of consideration payable under the terms of the New 2016 Raw Materials Supply Contract based on the delivery volume for the year ending 31 December 2016 estimated by the Directors and the demand from the buyer.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the entering into of the New 2016 Raw Materials Supply Contract is for the benefit of the Company as the sale is profitable and the Group is assured of payment on a timely basis and there are less financial risks.

The Directors (including the independent non-executive Directors) consider that the New 2016 Raw Materials Supply Contract has been negotiated on an arm’s length basis and on normal commercial terms which are fair and reasonable and the transactions contemplated thereunder 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 New 2016 Raw Materials Supply 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 LLC "Sorskiy ferromolibdenoviy zavod”. 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 resolutions approving the New 2016 Raw Materials Supply Contract.

LISTING RULES IMPLICATIONS

LLC "Sorskiy ferromolibdenoviy zavod” is held by En+ (a substantial shareholder of the Company) as to more than 30% of the issued share capital. En+ is in turn held by Mr. Deripaska as to more than 50% of the issued share capital. LLC "Sorskiy ferromolibdenoviy zavod” is therefore an associate of Mr. Deripaska and of En+, and is thus a connected person of the Company under the Listing Rules.

Accordingly, the transactions contemplated under the New 2016 Raw Materials Supply Contract constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount for the financial year ending 31 December 2016 of the continuing connected transactions under the New 2016 Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply Contracts, 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 New 2016 Raw Materials Supply Contract and the Previously Disclosed Raw Materials Supply 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.

LLC "Sorskiy ferromolibdenoviy zavod” is principally engaged in ferromolybdenum production.

DEFINITIONS

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

27 January 2016

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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