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 HEAT SUPPLY CONTRACTS, SALE OF RAW MATERIALS, TRANSPORTATION CONTRACTS, PURCHASE OF ASSETS AND TRANSPORT LOGISTICS SERVICES CONTRACTS
Reference is made to the announcements of the Company dated 14 January 2015, 29 December 2015 and 6 July 2016 in relation to the Previously Disclosed Heat Supply Contracts; the announcement of the Company dated 23 December 2014 in relation to Previously Disclosed Raw Materials Supply Contracts; the announcements of the Company dated 14 January 2015, 29 December 2015, 20 January 2016, 4 March 2016, 6 April 2016, 20 May 2016, 31 May 2016, 5 July 2016, 14 July 2016, 26 August 2016, 4 October 2016 and 13 October 2016 in relation to the Previously Disclosed Transportation Contracts; and the announcements of the Company dated 4 September 2015, 23 December 2015, 17 June 2016 and 29 November 2016 in relation to the Previously Disclosed Purchase of Assets Contracts. |
HEAT SUPPLY CONTRACTS
THE NEW HEAT SUPPLY CONTRACTS
Reference is made to the announcements of the Company dated 14 January 2015, 29 December 2015 and 6 July 2016 in relation to the Previously Disclosed Heat Supply Contracts.
The Company announces that during December 2016 and on or around 1 January 2017, members of the Group entered/will enter into a series of agreements with associates of En+, pursuant to which associates of En+ agreed to supply heat energy to members of the Group (the "New Heat Supply Contracts"), details of which are set out below:
No. | Date of contract/ addendum | Purchaser (member of the Group) | Supplier (associate of En+) | Term of contract | Form of heat | Estimated amount of heat to be supplied for each year (approximate) | Estimated consideration payable each year excluding VAT (USD) | Payment terms | ||||||||
1 | Addendum expected to be dated 1 January 2017 to the contract dated 1 January 2013 | RUSAL Bratsk Open Joint Stock Company | JSC Irkutskenergo | Up to 31 December 2018 (Note 1) | Hot water and steam | Hot water: In 2017 330 Gcal In 2018 330 Gcal Coolant: In 2017 559 tons In 2018 559 tons | In 2017 USD 4,063 In 2018 USD 4,294 (Note 2) | Advance payment of 35% of the total price on the 18th day of each month, and 50% on the 30th day of each month with the remaining 15% being paid by the 10th day of the next month | ||||||||
2 | Contract dated 30 December 2016 | RUSAL Sayanogorsk Aluminium Smelter Joint Stock Company | Khakass Utility Systems Limited Liability Company ("Khakass Utility Systems LLC | Up to 31 December 2017 | Hot water | Thermal energy 340,458 Gcal Demineralized water (coolant) 1.35 million m3 | 2017: Thermal energy USD4,103,454 Demineralized water (coolant) USD95,958 (Note 3) | Fee for 85% of the total amount of thermal energy, agreed upon by the parties to be paid no later than the 20th day of the month of the current billing period (month). The remaining fee to be paid no later than the 10th day of the month following the billing period (month), on the basis of readings of metering devices or by calculation in case of absence of metering devices. | ||||||||
3 | Contract dated 30 December 2016 | RUSAL Sayanogorsk Aluminium Smelter Joint Stock Company | Closed joint-stock company "Baykalenergo" | Up to 31 December 2017 | Heat Supply contract (thermal energy in the hot water for a garage) | Thermal energy 437 Gcal | 2017: USD 12,476 (Note 4) | Payment to be made not later than 20th of the following month after receipt of the invoice | ||||||||
4 | Contract dated 30 December 2016 | RUSAL Sayanogorsk Aluminium Smelter Joint Stock Company | Closed joint-stock company "Baykalenergo" | Up to 31 December 2017 | Heat Supply contract (thermal energy in the hot water) | Thermal energy 4,362.4 Gcal Coolant 54,124.2 m3 | 2017: Thermal energy USD126,023 Coolant USD13,848 (Note 5) | Payment to be made not later than 20th of the following month after receipt of the invoice | ||||||||
5 | Contract dated 28 December 2016 | JSC SibVAMI | JSC Irkutskenergo | Up to 31 December 2019 | Heat supply contract (heat energy, heating water) | Heat energy 2017: 1700 Gcal 2018: 1700 Gcal 2019: 1700 Gcal Heating water 2017: 1980 tons 2018: 1980 tons 2019: 1980 tons | 2017: USD26,235 2018: USD30,170 2019: USD34,696 (Note 6) | Advance payment of 35% of the total price on the 18th day of the current month and 50% by the last day of the current month, with the remaining 15% being paid by the 10th day of the next month | ||||||||
6 | Contract dated 28 December 2016 | RUSAL SAYANAL OJSC | Khakass Utility Systems LLC | Up to 31 December 2017 | Heat and chemically purified water | Heat 34,000 Gcal Chemically purified water 77,000 m3 | 2017: Heat USD389,794 Chemically purified water USD5,192 (Note 7) | Payment not later than the 28th day of the month following the billing month | ||||||||
7 | Addendum dated 30 December 2016 to the contract dated 28 December 2015 | RUSAL Sayanogorsk Aluminium Smelter Joint Stock Company | Khakass Utility Systems LLC | Up to 31 December 2016 | Heat supply (in hot water) | In 2016 Thermal energy: 24,179 Gcal In 2016 -Demineralized (chemical purified) water (coolant): 150,331 m3 | In 2016 Thermal energy: 211,348 In 2016 -Demineralized (chemical purified) water (coolant): 6,747 (Note 8) | - The first payment period no later than the 18th day of the billing month, on the basis of the invoice, the purchaser pays 35% of the total cost of thermal energy; The second payment period no later than the last day of the billing month, on the basis of the invoice, the purchaser pays 50% of the total value of the amount of heat energy; The third payment period no later than the 10th day of the month following the billing month, the purchaser pays the difference between the cost of the actual amount of heat received, and the amount paid previously. | ||||||||
Total estimated consideration for the year: | 2016: USD218,096 2017: USD4,777,043 2018: USD34,464 2019: USD34,696 |
Notes:
1. This is an additional agreement to the heat supply contract dated 1 January 2013 (as announced by the Company on 17 April 2013). The term of contract will be extended for the same period and on the same terms if none of the parties declares its termination or amendment or signing of a new contract before its validity period is over.
2. The heat energy rate in hot water for the 1st half of 2017 is approximately USD11.67/Gcal and for the 2nd half of 2017 is approximately USD12.47/Gcal. The heat energy rate in hot water for the 1st half of 2018 is approximately USD12.47/Gcal and for the 2nd half of 2018 is approximately USD13.26/Gcal. The coolant rate for the 1st half of 2017 is approximately USD0.24/m3 and for the 2nd half of 2017 is approximately USD0.25/m3. The coolant rate for the 1st half of 2018 is approximately USD0.25/m3 and for the 2nd half of 2018 is approximately USD0.27/m3
3. The heat energy rate in hot water for the 1st half of 2017 is approximately USD11.29/Gcal and for the 2nd half of 2017 is approximately USD12.99/Gcal. The coolant rate for the 1st half of 2017 is approximately USD0.07/m3 and for the 2nd half of 2017 is approximately USD0.08/m3
4. The heat energy rate for the 1st half of 2017 is approximately USD26.89/Gcal and for the 2nd half of 2017 is approximately USD30.93/Gcal.
5. The heat energy rate for the 1st half of 2017 is approximately USD26.89/Gcal and for the 2nd half of 2017 is approximately USD30.92/Gcal. The coolant rate for the 1st half of 2017 is approximately USD0.24/m3 and for the 2nd half of 2017 is approximately USD0.27/m3
6. The heat energy rate for 2017, 2018 and 2019 is approximately USD13.57/Gcal, USD15.61/Gcal and USD17.95/Gcal respectively. The heating water rate for 2017, 2018 and 2019 is approximately USD0.26/ton, USD0.3/ton and USD0.35/ton respectively.
7. The heat energy rate for 2017 is approximately USD11.74/Gcal. The rate for chemically purified water is approximately USD0.07/m3
8. The contract price is proposed by Khakass Utility Systems LLC and agreed between the parties. The thermal energy rate for the first half of 2016 is approximately USD9.7/Gcal and the chemical purified water (coolant) rate for the first half of 2016 is approximately USD0.06/m3. The thermal energy rate for the second half of 2016 is approximately USD10.49/Gcal and the chemical purified water (coolant) rate for the second half of 2016 is approximately USD0.06/m3
The consideration under the New Heat Supply Contracts will be settled in cash via wire transfer or by set-off of obligations.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the New Heat Supply Contracts and the Previously Disclosed Heat Supply Contracts should be aggregated, as they were entered into by members of the Group with the associates of En+, and the subject matter of each contract relates to the heat supply by the associates of En+ to the Group.
The annual aggregate transaction amount that is payable by the Group to the associates of En+ under the New Heat Supply Contracts and the Previously Disclosed Heat Supply Contracts for each of the financial years ending 31 December 2016, 31 December 2017, 31 December 2018 and 31 December 2019 is estimated to be approximately USD9.538 million, USD10.119 million, USD34,464 and USD34,696 respectively.
Each of JSC Irkutskenergo and Khakass Utility Systems LLC is a monopolist in the development and transport of thermal energy in Irkutsk region and the city of Sayanogorsk respectively and Closed Joint Stock Company "Baykalenergo" is a monopolist in the transport of heat. Therefore, the New Heat Supply Contracts were entered into.
The contract price under each of the New Heat Supply Contracts has been arrived at after arm's length negotiation with reference to the market price and on terms no less favourable than those prevailing in the Russian market for the heat of the same type and quality and those offered by the associates of En+ to independent third parties. The annual aggregate transaction amount is derived from the total contract price under the New Heat Supply Contracts and the Previously Disclosed Heat Supply Contracts, which was based on the need of heat by the Group for the year.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The New Heat Supply Contracts are entered into for the purpose of obtaining heat for the Group's production process and for its facilities. The Company considers that the transactions contemplated under the New Heat Supply Contracts are for the benefit of the Company as there is no alternative supplier available in the respective regions.
The Directors (including the independent non-executive Directors) consider that the New Heat Supply Contracts are on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Heat Supply 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 New Heat Supply Contracts, save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of JSC Irkutskenergo, Khakass Utility Systems LLC and Closed Joint Stock Company "Baykalenergo". 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 New Heat Supply Contracts.
LISTING RULES IMPLICATIONS
Each of JSC Irkutskenergo, Khakass Utility Systems LLC and Closed Joint Stock Company "Baykalenergo" is held by En+ (being a substantial shareholder of the Company) 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. Accordingly, each of JSC Irkutskenergo, Khakass Utility Systems LLC and Closed Joint Stock Company "Baykalenergo" is a connected person of the Company under the Listing Rules. The transactions contemplated under the New Heat Supply Contracts therefore constitute continuing connected transactions of the Company.
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Heat Supply Contracts and the Previously Disclosed Heat Supply Contracts for the financial year ending 31 December 2016 and 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 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 shareholders' approval requirements under Chapter 14A of the Listing Rules.
Details of the New Heat Supply Contracts and the Previously Disclosed Heat 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.
SALE OF RAW MATERIALS
THE NEW RAW MATERIALS SUPPLY CONTRACTS
Reference is made to the announcement of the Company dated 23 December 2014 in relation to the Previously Disclosed Raw Materials Supply Contracts.
The Company announces that during December 2016 and on or around 1 January 2017, members of the Group, as seller, entered/will enter into contracts/addendums to the raw materials supply contracts as disclosed in the above mentioned announcement with associates of Mr. Deripaska/En+, as buyers, with major terms set out below (the "New Raw Materials Supply Contracts
Date of contract/ addendum | Seller (member of the Group) | Buyer (associate of Mr. Deripaska/ En+) | Raw materials to be supplied | Estimated delivery volume for the year | Estimated consideration payable for the year excluding VAT (USD) | Scheduled termination date | Payment terms | |||||||||
1 | Contract dated 30 December 2016 | Open Joint Stock Company "RUSAL Sayanogorsk Aluminum Smelter" | Limited Liability Company "Stroyservice" | Inventory sales (petrol, diesel fuel, oils, lubricants and building materials) | In 2017 Petroleum products (petrol, diesel fuel, oil and lubricants) 195.135 tons In 2017 Building materials 21,020 m3 | In 2017: 1,861,273 (Note 1) | 31 December 2017 | Payment is made upon delivery no later than 10 working days from the date of invoice | ||||||||
2 | Contract expected to be dated 1 January 2017 | "Bratsk Aluminium Smelter" | Limited Liability Company "KraMZ-Auto" | Oils and other lubricants | In 2017: Oil: 13,080 kg Other lubricants: 1,720 kg | In 2017: 13,443 (Note 2) | 31 December 2017 | Payment is due upon delivery within 10 business days, or by the netting of counter-obligations | ||||||||
3 | Contract dated 30 December 2016 | "RUSAL Sayanogorsk Aluminum Smelter" | Limited Liability Company "KraMZ-Auto" | Gasoline, diesel fuel, oil and grease | In 2017: Diesel fuel: 480 tons Gasoline: 60 tons Other items: 9,608 tons | In 2017: 321,259 (Note 3) | 31 December 2017 | Payment is due upon delivery within 10 business days, or by the netting of counter-obligations | ||||||||
4 | Contract dated 21 December 2016 | JSC "RUSAL Bratsk" (branch in Shelekhov) | Limited Liability Company "KraMZ-Auto" | Gasoline, diesel fuel, oil and grease | In 2016: Diesel fuel: 63,677 tons Gasoline: 6,502 tons Other items: 2,073 tons In 2017: Diesel fuel: 840 tons Gasoline: 84 tons Other items: 24.87 tons | In 2016: 36,582 In 2017: 585,725 (Note 4) | 31 December 2017 | Payment is due upon delivery within 10 business days, or by the netting of counter-obligations | ||||||||
5 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Diesel fuel | 7.2 tons | In 2017: 3,864 (Note 5) | 31 December 2017. May be extended by additional agreement. | 25% of the approved volume of sales shall be paid in the first week and paid no later than the 30th of previous month. Payment for the following weeks should be made no later than the last business day of the previous week. | ||||||||
6 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Stone Coal | 152,701 tons | In 2017: 5,638,191 (Note 6) | 31 December 2017. May be extended by additional agreement. | 25% of the approved volume of sales shall be paid in the first week and paid no later than the 30th of previous month. Payment for the following weeks should be made no later than the last business day of the previous week. | ||||||||
7 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Fuel oil | 3,650 tons | In 2017: 599,659 (Note 7) | 31 December 2017. May be extended by additional agreement. | 25% of the approved volume of sales shall be paid in the first week and paid no later than the 30th of previous month. Payment for the following weeks should be made no later than the last business day of the previous week. | ||||||||
8 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Nepheline sludge | 247,640 tons | In 2017: 838,170 (Note 8) | 31 December 2017. May be extended by additional agreement. | Payment for the first week is made no later than the 30th of the month of the previous shipment. Payment for the following weeks is made no later than the last working day of the previous week. | ||||||||
9 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Clay from overburden | 76,275 tons | In 2017: 57,207 (Note 9) | 31 December 2017. May be extended by additional agreement. | Payment for the first week is made no later than the 30th of the month of the previous shipment. Payment for the following weeks is made no later than the last working day of the previous week. | ||||||||
10 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Limestone | 809,721 tons | In 2017: 3,013,037 (Note 10) | 31 December 2017. May be extended by additional agreement. | Payment for the first week is made no later than the 30th of the month of the previous shipment. Payment for the following weeks is made no later than the last working day of the previous week. | ||||||||
11 | 28 December 2016, which is an additional agreement to the contract dated 22 December 2014 and disclosed in the Company's announcement dated 23 December 2014 | RUSAL Achinsk JSC | Achinsk Cement LLC | Pulverized coal | 12,000 tons | In 2017: 540,347 (Note 11) | 31 December 2017. May be extended by additional agreement. | Payment for the first week is made no later than the 30th of the month of the previous shipment. Payment for the following weeks is made no later than the last working day of the previous week. | ||||||||
12 | Contract expected to be dated 1 January 2017 | "Krasnoyarsk Aluminium Smelter" | Limited Liability Company "KraMZ-Auto" | Gasoline, diesel fuel, oil, and other petroleum products | 2017: Diesel fuel: 660 tons Gasoline: 42 tons Other fuels: 29,422 tons | 2017: 406,999 (Note 12) | 31 December 2017 | Payment is due upon delivery within 10 business days, or the netting of counter-obligations | ||||||||
13 | 28 December 2016, which is an additional agreement to the contract dated 6 February 2015 | Joint Stock Company "United Company RUSAL-Trade House" | "Glavstroi Ust-Labinsk" Ltd. | Aluminum powder | 2017: 198 tons | 2017: 695,178 (Note 13) | 31 December 2017 | 100% advance payment | ||||||||
14 | 28 December 2016, which is an additional agreement to the contract dated 1 September 2015 | Joint Stock Company "United Company RUSAL-Trade House" | LLC "Sorskiy Ferromolibdenoviy Zavod" | Aluminum powder | 2017: 243 tons | 2017: 782,460 (Note 14) | 31 December 2017 | 100% payment within 30 days from date of shipment | ||||||||
Total estimated consideration payable for the year | 2016: 36,582 2017: 15,356,812 |
Notes:
1. The contract price is agreed between the parties and based on per unit price of USD564.77/ton (diesel fuel), USD674.20/ton (petrol), USD1.59/kg (oils and lubricants) and USD82.41/m3 (building materials).
2. The contract price is agreed between the parties and based on per unit price of USD0.91/kg for oil and USD0.91/kg for other lubricants.
3. The contract price is agreed between the parties and based on per unit price of USD564.77/ton for diesel fuel, USD674.20/ton for gasoline and USD1.01/kg for other items.
4. The contract price is agreed between the parties and based on per unit price of USD550/ton for diesel fuel, USD600/ton for petrol and USD2,974/ton for other items.
5. The contract price is agreed between the parties and based on per unit price of USD536.62/ton.
6. The contract price is agreed between the parties and based on per unit price of USD36.92/ton.
7. The contract price is agreed between the parties and based on per unit price of USD164.29/ton.
8. The contract price is agreed between the parties and based on per unit price of USD3.38/ton.
9. The contract price is agreed between the parties and based on per unit price of USD0.75/ton.
10. The contract price is agreed between the parties and based on per unit price of USD3.72/ton.
11. The contract price is agreed between the parties and based on per unit price of USD45.03/ton.
12. The contract price is agreed between the parties and based on per unit price of USD527.68/ton for diesel fuel, USD588.8/ton for petrol and USD1,155.55/ton for other petroleum products.
13. The contract price per ton is linked to the price of aluminium on the London Metal Exchange ("LME") plus a premium (of approximately USD1,911) 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 ("FAS"). 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.
14. The contract price per ton is linked to the price of aluminium on the LME plus a premium (of approximately USD1,620) calculated on a monthly basis and in accordance with the rules prescribed by the FAS. 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 under the New Raw Materials Supply Contracts is to be paid in cash via bank transfer or set-off of obligations.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions under the New Raw Materials Supply Contracts are required to be aggregated together, 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 Raw Materials Supply Contracts is estimated to be approximately USD16.276 million for the year ending 31 December 2016 and to be approximately USD15.357 million for the year ending 31 December 2017.
The consideration payable under the New Raw Materials Supply Contracts is calculated by multiplying the unit price by the volume. The unit price is set out in the notes to the table above, which is based on the total production cost or original purchase price plus gross margin where applicable.
The consideration payable under the New Raw Materials Supply Contracts has been arrived at after arm's length negotiation with reference to the 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 Raw Materials Supply Contracts based on the delivery volume for the year ending 31 December 2016 and on the delivery volume for the year ending 31 December 2017 estimated by Directors and the demand from the buyer.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The Directors consider that the entering into of the New Raw Materials Supply Contracts 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 Raw Materials Supply Contracts is on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Raw Materials Supply 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 contracts 1 to 4, 12 and 14 in the table above, save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of Limited Liability Company "Stroyservice", Limited Liability Company "KraMZ-Auto" and 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 relevant New Raw Materials Supply Contracts.
None of the Directors has a material interest in the transactions contemplated under contracts 5 to 11 and 13 in the table above, save for (a) Mr. Deripaska, who is a director of Basic Element and is interested in more than 50% of the issued share capital of Basic Element; (b) Ms. Gulzhan Moldazhanova, who is a director of Basic Element; and (c) Ms. Olga Mashkovskaya, who is a deputy chief executive officer for finance of Basic Element. Basic Element is the holding company of Achinsk Cement LLC and "Glavstroi Ust-Labinsk" Ltd. Accordingly, Mr. Deripaska, Ms. Gulzhan Moldazhanova and Ms. Olga Mashkovskaya did not vote on the Board resolutions approving the relevant New Raw Materials Supply Contracts.
LISTING RULES IMPLICATIONS
Each of Limited Liability Company "Stroyservice", Limited Liability Company "KraMZ-Auto" and LLC "Sorskiy Ferromolibdenoviy Zavod" is 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. Accordingly, Limited Liability Company "Stroyservice", Limited Liability Company "KraMZ-Auto" and LLC "Sorskiy Ferromolibdenoviy Zavod" are the connected persons of the Company under the Listing Rules.
Each of Achinsk Cement LLC and "Glavstroi Ust-Labinsk" Ltd. is held by Basic Element as to more than 30% of the issued share capital. Basic Element is in turn held by Mr. Deripaska (an executive Director) as to more than 50% of the issued share capital. Each of Achinsk Cement LLC and "Glavstroi Ust-Labinsk" Ltd. is therefore an associate of Mr. Deripaska and is thus a connected person of the Company.
Accordingly, the transactions contemplated under the New Raw Materials Supply Contracts constitute continuing connected transactions of the Company.
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Raw Materials Supply Contracts for the financial year ending 31 December 2016 and 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 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 Raw Materials Supply Contracts 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.
TRANSPORTATION CONTRACTS
THE NEW TRANSPORTATION CONTRACTS
Reference is made to the announcements of the Company dated 14 January 2015, 29 December 2015, 20 January 2016, 4 March 2016, 6 April 2016, 20 May 2016, 31 May 2016, 5 July 2016, 14 July 2016, 26 August 2016, 4 October 2016 and 13 October 2016 in relation to the Previously Disclosed Transportation Contracts.
The Company announces that during December 2016 transportation contracts were entered into between members of the Group and associates of En+, pursuant to which the associates of En+ agreed to provide transportation services to the members of the Group (the "New Transportation Contracts") with major terms set out below:
Date of contract/ addendum | Customer (member of the Group) | Service provider (associate of En+) | Transportation services | Estimated consideration payable for the years ending 31 December 2016 or 31 December 2017 excluding VAT (USD) | Scheduled termination date | Payment terms | ||||||||
1 | Contract dated 21 December 2016 | "RUSAL Bratsk" (branch in Shelekhov) | KraMZ- Auto | Transportation services for passengers | 2016: 2,126 2017: 65,706 (Note 1) | 31 December 2017 | Deferred payment of 60 calendar days, or the netting of counter-obligations | |||||||
2 | Contract dated 21 December 2016 | "RUSAL Bratsk" (branch in Shelekhov) | KraMZ- Auto | Transportation services | 2016: 108,409 2017: 3,348,937 (Note 1) | 31 December 2017 | Deferred payment of 60 calendar days, or the netting of counter-obligations | |||||||
3 | Contract dated 26 December 2016 | Russian Engineering Company | KraMZ-Auto | Motor transportation services | 2017: 71,744 (Note 2) | 31 December 2017 | Payment to be made in two equal installations of 50% of the total amount, the first installment before the 15th of the month following the report month, and the second installment before the 30th of the month following the report month | |||||||
4 | Contract dated 28 December 2016 | Russian Engineering Company | KraMZ-Auto | Transportation services | 2016: 5,386 2017: 203,008 (Note 3) | 31 December 2017. If by 30 calendar days prior to the expiration of the agreement none of the parties notifies the other party in writing of the intention to terminate the agreement, the agreement shall be automatically extended for the subsequent calendar year | Payment to be made within 60 calendar days after the render of the service | |||||||
5 | Contract dated 26 December 2016 | Russian Engineering Company | KraMZ-Auto | Motor transportation services | 2017: 294,037 (Note 4) | 31 December 2017 | Payment to be made in two equal installations of 50% of the total amount, the first installment before the 15th of the month following the report month, and the second installment before the 30th of the month following the report month | |||||||
6 | Contract dated 30 December 2016 | RUSAL Sayanogorsk Aluminium Smelter Joint Stock Company | OVE | Organization of transport and the provision of railway transport services, shipment of goods from the factory, as well as the provision of wagons | 2017: 4,300,796 (Note 5) | 31 December 2017 | Payment within 10 working days after receipt of invoice | |||||||
7 | Addendum #3 dated 28 December 2016 to the contract dated 20 January 2016 | RUSAL SAYANAL OJSC | OVE | Shipment of goods from Aluminievaya station to Kamishta station back and forth | 2017: 28,937 (Note 6) | 31 December 2017 Contract may be extended if none of the parties announces its intention to terminate the contract one month before its expiry. | Payment within 10 banking days after receipt of invoice | |||||||
8 | Contract dated 28 December 2016 | Russian Engineering Company | KraMZ-Auto | Transportation services | 2017: 247,550 (Note 7) | 31 December 2017 | Payment to be made in two equal installations of 50% of the total amount, the first installment before the 15th of the month following the report month, and the second installment before the 30th of the month following the report month | |||||||
9 | Contract dated 28 December 2016 | RUSAL SAYANAL OJSC | KraMZ-Auto | Passenger forwarding | 2017: 22,608 (Note 8) | 31 December 2017 | Payment within 10 days after receipt of invoice | |||||||
10 | Contract dated 28 December 2016 | RUSAL SAYANAL OJSC | KraMZ-Auto | Cargo and passenger forwarding | 2017: 210,604 (Note 9) | 31 December 2017 | Payment within 15 days after receipt of invoice | |||||||
11 | Addendum #4 dated 28 December 2016 to the contract dated 3 March 2016 | Russian Engineering Company | KraMZ-Auto | Motor transportation services | 2016: 456 (Note 10) | 31 December 2016 | Payment to be made in two equal installations of 50% of the total amount, one before the 15th of the month following the report month, and the other before the 30th of the month following the report month after the receipt of the invoice. | |||||||
12 | Addendum #5 dated 28 December 2016 to the contract dated 3 March 2016 | Russian Engineering Company | KraMZ-Auto | Motor transportation services | 2016: 626 (Note 10) | 31 December 2016 | ||||||||
Total estimated consideration payable for the year: | 2016: 117,003 2017: 8,793,927 |
Notes:
1. The service fee is calculated by multiplying the price per unit of services rendered (expressed in mash/hour depending on type and kind of equipment used) by the number of hours of usage.
2. The service fee is calculated by the number of trips to transfer passengers along the agreed routes and the fare per passenger. The number of trips is determined by the bus schedule for the routes. The cost of one trip ranges from approximately USD11.17 to USD37.23 (excluding VAT).
3. The service fee is calculated by the demand for transportation services and the type of vehicle engaged, the quantity of vehicle-hours and vehicle-hour cost (which ranges from USD11.77 to USD36.73 depending on vehicle type).
4. The service fee is calculated by the demand for transportation services and the type of vehicle engaged, the quantity of vehicle-hours and vehicle-hour cost (which ranges from USD1.95 to USD22.23 depending on vehicle type).
5. The service fee is calculated by multiplying the weight of cargos, tariff for transportation (being USD 0.036 for 1 kilometre) and the distance (being 58 kilometres).
6. The service fee is calculated by multiplying the average cost per ton/km (approximately USD0.039) and the estimated number of ton/km required (approximately 742 ton/km).
7. The service fee is calculated by the demand for transportation services and the type of vehicle engaged, the quantity of vehicle-hours and vehicle-hour cost (which ranges from USD5.76 to USD37.69 depending on vehicle type).
8. The service fee is calculated by multiplying the cost per month (approximately USD1,884 excluding VAT) and the term of the contract.
9. The service fee is determined by the demand for the services (approximately 1,528 operating hours and 1,234 cargo trips), the number of operating hours (the average cost per hour is USD27), the cost per cargo trip (the average cost per cargo trip is USD130) and an additional payment per year (the average additional payment per year is USD39,113 excluding VAT).
10. The cost of services is determined by the demand schedules for transportation services indicating vehicle types engaged (mobile crane), quantity of vehicle-hours and vehicle-hour cost (which is approximately USD31.50).
The consideration under the New Transportation Contracts is to be paid in cash via wire transfer or set-off of obligations between parties.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the New Transportation Contracts and the Previously Disclosed Transportation Contracts should be aggregated for each of the financial years ending 31 December 2016 and 31 December 2017, as they were entered into by members of the Group with the associates of En+, and the subject matter of each contract relates to the provision of transportation services by the associates of En+ to the Group.
The annual aggregate transaction amounts that are payable by the Group to the associates of En+ under the New Transportation Contracts and the Previously Disclosed Transportation Contracts for the financial year ending 31 December 2016 are estimated to be approximately USD16.586 million.
The annual aggregate transaction amounts that are payable by the Group to the associates of En+ under the New Transportation Contracts and the Previously Disclosed Transportation Contracts for the financial year ending 31 December 2017 are estimated to be approximately USD21.413 million.
Regarding the contracts mentioned in items 1 to 5 and 8 to 12 in the table above, the Company invited several organizations to take part in the tender in relation to the required transportation services and chose the contractor offering the best terms and conditions (taking into account the price and quality offered by the service provider, the ability to meet the needs of the plants, availability of extra vehicles in the vehicle pool, proximity to the production sites, the service provider's experience in the aluminum industry and the business relationship with the service provider) and then entered into the contracts with the chosen service provider. Regarding the contracts mentioned in items 6 and 7 in the table above, as OVE owns the only railway track section which is required for the transportation services, the contracts were entered into.
The contract price under the New Transportation Contracts has been arrived at after arm's length negotiation with reference to the market price and on terms no less favourable than those prevailing in the Russian market for transportation services of the same type and quality and those offered by the associates of En+ to independent third parties. The annual aggregate transaction amount is derived from the total contract price under the New Transportation Contracts, which was based on the need of transportation services by the Group for the relevant year.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The New Transportation Contracts are entered into for the purpose of transporting goods, cargoes and passenger forwarding of the Group. The Company considers that the transactions contemplated under the New Transportation Contracts are for the benefit of the Company, as the services provided are required in the production process of the Group and the service providers offered a competitive price, is capable of meeting the Group's transportation needs and is conveniently located.
The Directors (including the independent non-executive Directors) consider that the New Transportation Contracts are on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Transportation 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 New Transportation Contracts, save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of each of OVE and KraMZ-Auto. 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 Transportation Contracts.
LISTING RULES IMPLICATIONS
Each of OVE and KraMZ-Auto is an indirect subsidiary of En+, and is therefore an associate of En+ which is a substantial shareholder of the Company. Accordingly, each of OVE and KraMZ-Auto is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the New Transportation Contracts constitute continuing connected transactions of the Company.
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Transportation Contracts and the Previously Disclosed Transportation Contracts for each of the financial years ending 31 December 2016 and 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 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 Transportation Contracts 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.
PURCHASE OF ASSETS
THE NEW PURCHASE OF ASSETS CONTRACTS
Reference is made to the announcements of the Company dated 4 September 2015, 23 December 2015, 17 June 2016 and 29 November 2016 in relation to the Previously Disclosed Purchase of Assets Contracts.
The Company announces that on 26 December 2016, a member of the Group, RUSAL Novokuznetsk, as buyer, entered into an assets supply contract with an associate of En+, LLC "Production association KraMZ Tekhnoservice" ("LLC "PO KTS""), as seller, pursuant to which RUSAL Novokuznetsk agreed to purchase and LLC "PO KTS" agreed to supply non-standard process equipment (the "Assets Supply Contract"). The terms of the contract are set out in each addendum as set out below.
The Company announces that the following addendums to the Assets Supply Contract were entered into between RUSAL Novokuznetsk, a member of the Group, as buyer, and LLC "PO KTS", an associate of En+, as seller, pursuant to which LLC "PO KTS" agreed to sell assets to RUSAL Novokuznetsk (the "Addendums", together with the Assets Supply Contract, the "New Purchase of Assets Contracts") with major terms set out below:
Date of addendum | Buyer (member of the Group) | Seller (associate of En+) | Subject matter | Estimated consideration payable for the years ending 31 December 2016 or 31 December 2017 excluding VAT (USD) | Scheduled termination date | Payment terms | ||||||||
1 | Addendum dated 26 December 2016, which is Addendum #1 to the Assets Supply Contract | RUSAL Novokuznetsk | LLC "PO KTS" | Reinforced adapter, automatic grab for anode holders, clamshell grab and support | 2016: 27,845 (Note 1) | 31 January 2017 | 50% prepayment within 10 calendar days from the contract date; remaining 50% to be paid within 15 calendar days after delivery to the buyer's warehouse | |||||||
2 | Addendum dated 26 December 2016, which is Addendum #2 to the Assets Supply Contract | RUSAL Novokuznetsk | LLC "PO KTS" | Two anode superstructures with risers | 2016: 128,632 2017: 138,527 (Note 2) | 31 May 2017 | 50% prepayment within 10 calendar days from the contract date; remaining 50% to be paid within 15 calendar days after delivery to the buyer's warehouse | |||||||
3 | Addendum dated 26 December 2016, which is Addendum #3 to the Assets Supply Contract | RUSAL Novokuznetsk | LLC "PO KTS" | Temporary anode suspension system | 2016: 49,062 2017: 52,836 (Note 3) | 31 July 2017 | 50% prepayment within 10 calendar days from the contract date; 40% to be paid upon delivery; remaining 10% to be paid after testing and approval by the industrial safety review board | |||||||
Total estimated consideration payable for the year: | 2016: 205,539 2017: 191,363 |
Notes:
1. The contract price is agreed between the parties and based on per unit price as follows: reinforced adapter approximately USD1,289 per piece; automatic grab for anode holders approximately USD 1,556 per piece; clamshell grab approximately USD 23,879 per piece; support approximately USD 1,123 per piece.
2. The contract price is agreed between the parties and based on per unit price of approximately USD133,580.
3. The contract price is agreed between the parties and based on per unit price of approximately USD101,898.
The consideration under the New Purchase of Assets Contracts is to be paid in cash via wire transfer.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transaction contemplated under the New Purchase of Assets Contracts and the Previously Disclosed Purchase of Assets Contracts should be aggregated, as they were entered into by members of the Group with the associates of Mr. Deripaska/En+, and the subject matter of each contract relates to the purchase of assets from the associates of Mr. Deripaska/En+ by the Group for the years ending 31 December 2016 and 31 December 2017 respectively.
The annual aggregate transaction amounts that are payable by the Group to the associates of Mr. Deripaska/En+ under the New Purchase of Assets Contracts and the Previously Disclosed Purchase of Assets Contracts for the financial year ending 31 December 2016 is estimated to be approximately USD21.123 million.
The annual aggregate transaction amounts that are payable by the Group to the associates of Mr. Deripaska/En+ under the New Purchase of Assets Contracts and the Previously Disclosed Purchase of Assets Contracts for the financial year ending 31 December 2017 is estimated to be approximately USD6.404 million.
The Company chose the contractor offering the best terms and conditions (taking into account the price, reasonable periods of manufacturing and delivery and having the necessary equipment and human resources to provide the services) and then entered into the contract/addendum with the chosen seller. Accordingly, the New Purchase of Assets Contracts were entered into.
The contract price under the New Purchase of Assets Contracts has been arrived at after arm's length negotiation with reference to the market price and on terms no less favourable than those prevailing in the Russian market for assets 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 New Purchase of Assets Contracts has been set out in the notes to the table above.
The annual aggregate transaction amount is derived from the total contract price under the New Purchase of Assets Contracts which was based on the amount of assets to be supplied and its contract price.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The New Purchase of Assets Contracts were entered into for the purpose of acquiring assets. The Company considers that the transactions contemplated under the New Purchase of Assets Contracts are for the benefit of the Company, as LLC "PO KTS" offered the assets to the Group at a competitive price and the quality of the assets satisfy the requirement of the Group.
The Directors (including the independent non-executive Directors) consider that the New Purchase of Assets Contracts are on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Purchase of Assets 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 New Purchase of Assets Contracts, 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 "PO KTS". 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 Purchase of Assets Contracts.
LISTING RULES IMPLICATIONS
LLC "PO KTS" is 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 New Purchase of Assets Contracts for each of the financial years ending 31 December 2016 and 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 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 Purchase of Assets Contracts and the Previously Disclosed Purchase of Assets 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.
TRANSPORT LOGISTICS SERVICES CONTRACTS
THE NEW TRANSPORT LOGISTICS SERVICES CONTRACTS
The Company announces that during December 2016, members of the Group and associates of En+ entered into contracts pursuant to which the associates of En+ agreed to provide transport logistics services to the members of the Group (the "New Transport Logistics Services Contracts") with major terms set out below:
Date of contract | Customer (member of the Group) | Service provider (associate of En+) | Services | Estimated consideration payable for the year ending 31 December 2017 excluding VAT (USD) | Scheduled termination date | Payment terms | ||||||||
1 | Contract dated 28 December 2016 | RTI LIMITED | "Russian Transport Company" LLC | Transport logistics services | 4,077,757 | 31 December 2019 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
2 | Contract dated 29 December 2016 | "United Company RUSAL- Trading House" OJSC | "Russian Transport Company" LLC | Transport logistics services | 2,884,181 | 31 December 2019 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
3 | Addendum dated 27 December 2016 to the contract dated 30 December 2015 | "United Company RUSAL- Trading House" OJSC | En+ Logistics | Transport logistics services | 278,077 | 31 December 2017 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
4 | Contract dated 29 December 2016 | RUSALTRANS LLC | "Russian Transport Company" LLC | Transport logistics services | 1,633,121 | 31 December 2019 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
5 | Contract dated 29 December 2016 | RUSAL Achinsk JSC | "Russian Transport Company" LLC | Transport logistics services | 140,271 | 31 December 2019 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
6 | Contract dated 29 December 2016 | RUSALTRANS LLC | "Russian Transport Company" LLC | Transport logistics services | 446,356 | 31 December 2017 | Payment no later than the 15th day of the month after the month the service has been rendered. | |||||||
Total estimated consideration payable for the year ending 31 December 2017 | 9,459,763 |
The consideration under the New Transport Logistics Services Contracts is to be paid in cash via bank transfer.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
Based on the terms of the New Transport Logistics Service Contracts, the annual aggregate transaction amount that is payable by the members of the Group to the associates of En+ is up to approximately USD9.460 million for the year ending 31 December 2017. This annual aggregate transaction amount is estimated by the Directors based on the need for the transport logistics services by the Group and the total contract price.
The contract price payable under the New Transport Logistics 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 transport logistics services of the same type and quality and those offered by the associates of En+ to independent third parties. The Company chose the service providers as they offered competitive rates and were able to provide the services required.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
The New Transport Logistics Services Contracts were entered into for the purpose of obtaining logistics services. The Company considers that the transactions contemplated under the New Transport Logistics Services Contracts are for the benefit of the Company as the services provided are required in the production process of the Group.
The Directors (including the independent non-executive Directors) consider that the New Transport Logistics Services Contracts are on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Transport Logistics 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 New Transport Logistics Services Contracts save for Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova, who are directors of En+, being the holding company of each of "Russian Transport Company" LLC and En+ Logistics. 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 Transport Logistics Services Contracts.
LISTING RULES IMPLICATIONS
Each of "Russian Transport Company" LLC and En+ Logistics is a direct or indirect subsidiary of En+, and is therefore an associate of En+ which is a substantial shareholder of the Company. Thus each of "Russian Transport Company" LLC and En+ Logistics is a connected person of the Company under the Listing Rules. Accordingly, the transactions contemplated under the New Transport Logistic Services Contracts constitute continuing connected transactions of the Company.
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Transport Logistic Services Contracts 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 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 Transport Logistic Services Contracts 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 and sale of aluminium, including alloys and value-added products, and alumina.
Closed Joint Stock Company "Baykalenergo" is principally engaged in generating heat and electricity.
JSC Irkutskenergo is principally engaged in generating heat and electricity.
Khakass Utility Systems LLC is principally engaged in generating heat and electricity.
Limited Liability Company "Stroyservice" is principally engaged in the construction, repairing and in the provision of transportation services.
Achinsk Cement LLC is principally engaged in the production of cement.
"Glavstroi Ust-Labinsk" Ltd. is principally engaged in construction.
LLC "Sorskiy Ferromolibdenoviy Zavod" is principally engaged in ferromolybdenum production.
Limited Liability Company "KraMZ-Auto" is principally engaged in the provision of transportation services.
OVE is principally engaged in the provision of transportation services and railway transport.
LLC "PO KTS" is principally engaged in the production and sale of metal constructions.
"Russian Transport Company" LLC is principally engaged in the organization of different kinds of transportation services.
En+ Logistics is principally engaged in the organization of different kinds of transportation services.
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 Listing Rules. | |
"Basic Element" | Basic Element Limited, a company incorporated in Jersey. | |
"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" | 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. | |
"En+" | En+ Group Limited, a company incorporated in Jersey, a substantial shareholder of the Company. | |
"Group" | the Company and its subsidiaries. | |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock Exchange. | |
"Mr. Deripaska" | Mr. Oleg Deripaska, an executive Director. | |
"OVE" | OJSC Otdeleniye Vremennoy Expluatasii, an indirect subsidiary of En+. | |
"percentage ratios" | the percentage ratios under Rule 14.07 of the Listing Rules. | |
"Previously Disclosed Heat Supply Contracts" | the heat supply contracts entered into between members of the Group and the associates of En+, pursuant to which the associates of En+ agreed to supply heat energy to members of the Group as disclosed in the announcements of the Company dated 14 January 2015, 29 December 2015 and 6 July 2016. | |
"Previously Disclosed Purchase of Assets Contracts" | the agreements between members of the Group and the associates of Mr. Deripaska/En+, pursuant to which the associates of Mr. Deripaska/En+ agreed to sell assets to members of the Group, as disclosed in the announcements of the Company dated 4 September 2015, 23 December 2015, 17 June 2016 and 29 November 2016. | |
"Previously Disclosed Raw Materials Supply Contracts" | the raw materials supply contracts entered into between members of the Group and associates of En+, pursuant to which members of the Group will supply raw materials to the associates of En+ as disclosed in the announcement of the Company dated 23 December 2014. | |
"Previously Disclosed Transportation Contracts" | the series of transportation contracts between members of the Group and the associates of En+, pursuant to which the associates of En+ agreed to provide transportation services to members of the Group during each of the years ending 31 December 2016 and 31 December 2017, as disclosed in the announcements of the Company dated 14 January 2015, 29 December 2015, 20 January 2016, 4 March 2016, 6 April 2016, 20 May 2016, 31 May 2016, 5 July 2016, 14 July 2016, 26 August 2016, 4 October 2016 and 13 October 2016. | |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited. | |
"substantial shareholder" | has the same meaning ascribed thereto under the Listing Rules. | |
"USD" | United States dollars, the lawful currency of the United States of America. | |
"VAT" | value added tax. |
By Order of the Board of Directors of
United Company RUSAL Plc
Aby Wong Po Ying
Company Secretary
30 December 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, 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.aspxhttp://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/20161229005272/en/
Contacts:
United Company RUSAL Plc