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

17-Jan-2017 Intellasia | BusinessWire | 7:20 AM Print This Post

HONG KONG–(BUSINESS WIRE)–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
PURCHASE OF RAW
MATERIALS FOR PRODUCTION

Reference is made to the announcements of the Company dated 16
November 2016 and 30 December 2016 in relation to the purchase of
raw materials agreements.

The Company announces that on
16 January 2017, a member of the Group, UC RUSAL TH, as buyer, and
Open Joint Stock Company “ENERGOPROM – Chelyabinsk Electrode Plant”,
an associate of Mr. Blavatnik, as seller, entered into the
Additional Purchase of Anode Blocks Agreement.

Reference is made to the announcements of the Company dated 16 November
2016 and 30 December 2016 in relation to the purchase of raw materials
agreements.

ADDITIONAL PURCHASE OF ANODE BLOCKS AGREEMENT

The Company announces that on 16 January 2017, a member of the Group, UC
RUSAL TH, as buyer, entered into an additional agreement to the original
contract dated 5 May 2016, pursuant to which UC RUSAL TH agreed to
purchase and Open Joint Stock Company “ENERGOPROM – Chelyabinsk
Electrode Plant” (“OJSC “EPM-CheEP””) agreed to supply anode
blocks for production in the estimated amount of 37,800 metric tons for
an estimated total consideration of approximately USD17,753,400 (the “Additional
Purchase of Anode Blocks 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 additional agreement is 31 December 2017.

THE AGGREGATION APPROACH

Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected
transactions under the Additional Purchase of Anode Blocks Agreement and
the Previously Disclosed Purchase of Raw Materials Agreements for
Production are required to 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 purchase of raw
materials by members of the Group for the purpose of the Group’s
production.

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 Anode
Blocks Agreement and the Previously Disclosed Purchase of Raw Materials
Agreements for Production for the financial year ending 31 December 2017
is estimated to be approximately USD 40.910 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 Additional Purchase of Anode Blocks
Agreement is calculated by multiplying the price per metric ton by the
volume.

Under the Additional Purchase of Anode Blocks Agreement, the relevant
price per metric ton of the anode blocks is approximately USD478.50.

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 Company invited several organizations to
take part in the tender in relation to the purchase of the anode blocks
and chose the seller offering the best terms and conditions (taking into
account the price, quality of the products offered by the seller and the
proximity of the seller) and then entered into agreement with the chosen
seller.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the Additional Purchase of Anode Blocks
Agreement is 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 Additional Purchase of Anode Blocks Agreement has been
negotiated on an arm’s length basis and on normal commercial terms which
are fair and reasonable and the transactions contemplated under the
Additional Purchase of Anode Blocks 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 Additional Purchase of Anode Blocks Agreement, save
for Mr. Blavatnik, a former non-executive Director, who is interested in
more than 30% in OJSC “EPM-CheEP”.

LISTING RULES IMPLICATIONS

Mr. Blavatnik, a former non-executive Director, indirectly holds more
than 30% of the issued share capital of OJSC “EPM-CheEP”. OJSC
“EPM-CheEP” 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 Additional Purchase
of Anode Blocks Agreement constitute continuing connected transactions
of the Company.

The estimated annual aggregate transaction amount of the continuing
connected transactions under the Additional Purchase of Anode Blocks
Agreement and the Previously Disclosed Purchase of Raw Materials
Agreements for Production 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 agreements 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 Additional Purchase of Anode Blocks Agreement and the
Previously Disclosed Purchase of Raw Materials Agreements for Production
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.

OJSC “EPM-CheEP” is principally engaged in the production and sale of
graphite electrodes, anode blocks, carbon materials, structural
graphite, carbon fiber materials, products made from the above materials
and carbon mass by-products.

DEFINITIONS

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

 
“associate(s)”

has the same meaning ascribed thereto
under the ListingRules.

“Board” the board of Directors.
“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(s)”

has the same meaning ascribed thereto
under the Listing Rules.

“continuing connected transactions”

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.

“Mr. Blavatnik”

Mr. Len Blavatnik, a former non-executive
Director.

“percentage ratios”

the percentage ratios under Rule 14.07 of
the Listing Rules.

“Previously Disclosed Purchase of Raw Materials Agreements for
Production”

the agreements/addendums/additional
agreements between
members of the Group
and the associates of Mr. Blavatnik,
pursuant
to which the associates of Mr.
Blavatnik agreed to supply raw
materials to
members of the Group in 2017, as disclosed
in
the announcements of the Company
dated 16 November 2016 and
30 December
2016.

“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 the Board of Directors of
United Company RUSAL
Plc

Aby Wong Po Ying
Company Secretary

17 January 2017

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, Ms. Ekaterina Nikitina and
Mr. Marco Musetti, 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.

Contacts

United Company RUSAL Plc

 


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