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

Regulatory News:

United Company Rusal Plc (Paris:RUSAL) (Paris:RUAL):

Pursuant to Chapter 38 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission regulates United Company RUSAL Plc in relation to the listing of its shares on The Stock Exchange of Hong Kong Limited. The Securities and Futures Commission takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims 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

Additional 2015 RAW MATERIALS SUPPLY CONTRACTS

The Company announces that members of the Group, as sellers, have entered into the following raw materials supply contracts with the associates of Mr. Deripaska/En+, as buyers, with particulars set out below (the "Additional 2015 Raw Materials Supply Contracts”):

For each of the contracts set out in the table above, the consideration is to be satisfied in cash via wire transfer. For contracts no. 1 to no. 4 above, the scheduled termination date is 31 December 2015. For contract no. 5 above, the scheduled termination date is 31 December 2015 and may be extended for next calendar year if neither party declares its intention to terminate the contract in writing at least 20 days 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 Additional 2015 Raw Materials Supply Contracts are required to be aggregated together with the Previously Disclosed Raw Materials Supply Contracts, 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 Additional 2015 Raw Materials Supply Contracts and the Previously Disclosed Raw Materials Supply Contracts is estimated to be approximately USD28.38 million for the year ending 31 December 2015.

The consideration payable under the Additional 2015 Raw Materials Supply Contracts is calculated by multiplying the unit price by the volume. The unit price of the relevant raw materials are set out below (adopting the same numberings in the table which set out the major terms of the Additional 2015 Raw Materials Supply Contracts), which is based on the total production cost or original purchase price plus gross margin where applicable.

The consideration payable under the Additional 2015 Raw Materials Supply Contracts 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 Additional 2015 Raw Materials Supply Contracts and the Previously Disclosed Raw Materials Supply Contracts based on the delivery volume for the year ending 31 December 2015 estimated by Directors and the demand from the buyers.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Directors consider that the entering into of the Additional 2015 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. As to contracts no. 1 to 4, the sale of raw materials to the relevant buyers is to ensure continuous operations of the buyers as those buyers provide services to members of the Group (including transportation, repair and construction services). As to contract no. 5, it was entered into in order to comply with the requirements of the Federal Antimonopoly Service. As the Federal Antimonopoly Service instructs, the Group is required to supply certain raw materials to local consumers.

The Directors (including the independent non-executive Directors) consider that the Additional 2015 Raw Materials Supply Contracts have 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 Additional 2015 Raw Materials Supply Contracts, save for:

(i) 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 KraMZ-Auto LLC, Stroyservice LLC and LLC KraMZ. Mr. Deripaska is also indirectly interested in more than 30% of the issued share capital of KraMZ-Auto LLC and LLC KraMZ. Accordingly, Mr. Deripaska, Mr. Vladislav Soloviev, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova did not vote on the Board resolutions approving the raw materials supply contract with KraMZ-Auto LLC, Stroyservice LLC and LLC KraMZ.

LISTING RULES IMPLICATIONS

Each of KraMZ-Auto LLC, Stroyservice LLC and LLC KraMZ 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. Each of KraMZ-Auto LLC, Stroyservice LLC and LLC KraMZ is therefore an associate of Mr. Deripaska and of En+, and is thus a connected person of the Company.

Accordingly, the transactions contemplated under the Additional 2015 Raw Materials Supply Contracts constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount for the financial year ending 31 December 2015 of the continuing connected transactions under the Additional 2015 Raw Materials Supply Contracts 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 Additional 2015 Raw Materials Supply Contracts 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.

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

Stroyservice LLC is principally engaged in the provision of transportation services and construction materials.

LLC KraMZ is principally engaged in aluminium processing.

DEFINITIONS

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

14 January 2015

As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Ms. Vera Kurochkina, 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 and Mr. Mark Garber.

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 and http://www.rusal.ru/en/press-center/press-releases.aspx, respectively.