HONG KONG--(BUSINESS WIRE)--Regulatory News:
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UNITED COMPANY RUSAL PLC (Paris:RUSAL) (Paris:RUAL)
(Incorporated
under the laws of Jersey with limited
liability)
(Stock Code: 486)
CONTINUING CONNECTED TRANSACTIONS REPAIR SERVICES
Reference is made to the announcements of the Company dated 2 July 2015, 24 January 2017, 2 February 2017, 28 February 2017, 19 April 2017 and 25 April 2017 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that a member of the Group entered into an additional agreement with an associate of En+, pursuant to which the associate of En+ agreed to provide repair services to the member of the Group.
THE REPAIR SERVICES CONTRACTS
Reference is made to the announcements of the Company dated 2 July 2015, 24 January 2017, 2 February 2017, 28 February 2017, 19 April 2017 and 25 April 2017 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that a member of the Group entered into an additional agreement with an associate of En+, pursuant to which the associate of En+ agreed to provide repair services to the member of the Group (the “Additional Agreement to the Repair Services Contract”), details of which are set out below.
|
No. |
Date of the additional agreement |
Customer (member of the Group) |
Contractor (associate of En+) |
Term of the additional agreement |
Repair services |
Estimated consideration payable for the year ending 31 December 2017 excluding VAT (USD) |
Payment terms |
||||||||
|
1. |
Additional agreement
dated 22 May 2017 to the contract dated 10 January 2017 |
Public Joint Stock
Company “RUSAL Bratsk Aluminium Smelter” |
Joint-Stock Company “Irkutskenergoremont” |
Up to
31 December 2017 |
Production equipment maintenance and repair works | 32,245 (Note 1) |
Within 40
calendar days after the signing of the Performed Works Certificate based on the invoice |
||||||||
|
Total estimated consideration payable for the year 2017 |
32,245 | ||||||||||||||
Note:
1. The estimated consideration payable is calculated on the basis of labour cost which ranges from USD3.38 to USD3.99 per hour (excluding VAT).
The consideration under the Additional Agreement to the Repair Services Contract is to be paid in cash via wire transfer or by way of set-off.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
The contract price payable under the Additional Agreement to the Repair Services Contract 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 Additional Agreement to the Repair Services Contract is the price of contract offered by the associates of En+ which is based on the estimated costs (including labour costs and the necessary materials) for the relevant repair works. The Company invited several organizations to take part in the tender in relation to the required repair services and chose the contractor offering the best terms and conditions (taking into account the price, quality offered by the contractor and availability of professionals with the required skill and experience) and then entered into the additional agreement with the chosen contractor.
Based on the terms of the Additional Agreement to the Repair Services Contract and the Previously Disclosed 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 2017 is estimated to be approximately USD13.026 million.
The annual aggregate transaction amount is estimated by the Directors based on the amount of repair services to be received and the contract price.
THE AGGREGATION APPROACH
Pursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the Additional Agreement to the Repair Services Contract and the Previously Disclosed 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 Additional Agreement to the Repair Services Contract is for the benefit of the Company, as the contractor offered a competitive price.
The Directors (including the independent non-executive Directors) consider that the Additional Agreement to the Repair Services Contract 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 Agreement to the Repair Services Contract 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 Additional Agreement to the Repair Services 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 Joint-Stock Company “Irkutskenergoremont”. 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 Additional Agreement to the Repair Services Contract.
LISTING RULES IMPLICATIONS
Joint-Stock Company “Irkutskenergoremont” 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 Additional Agreement to the Repair Services Contract and the Previously Disclosed Repair 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 the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
Details of the Additional Agreement to the Repair Services Contract and the Previously Disclosed 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 and sale of aluminium, including alloys and value-added products, and alumina.
Joint-Stock Company “Irkutskenergoremont” is principally engaged in activities for supporting of operability of thermal power plants.
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. | |
| “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. | |
| “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. | |
| “percentage ratios” | the percentage ratios under Rule 14.07 of the Listing Rules. | |
| “Previously Disclosed Repair Services Contracts” |
the repair services contracts between members of the Group and associates of En+, pursuant to which the associates of En+ agreed to provide repair services to members of the Group during the year 2017, as disclosed in the announcements of the Company dated 2 July 2015, 24 January 2017, 2 February 2017, 28 February 2017, 19 April 2017 and 25 April 2017.
|
|
| February 2017, 28 February 2017, 19 April 2017 and 25 April 2017. | ||
| “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 |
23 May 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.