United Company RUSAL Plc: Continuing Connected Transactions Transportation Contracts, Repair Services and Purchase of Assets

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

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UNITED COMPANY RUSAL PLC
(Incorporated under the laws of Jersey with limited liability)
(Stock Code: 486)

CONTINUING CONNECTED TRANSACTIONS
TRANSPORTATION CONTRACTS,
REPAIR SERVICES AND
PURCHASE OF ASSETS

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, 5 July 2016, 30 December 2016, 16 January 2017, 28 February 2017, 7 July 2017 and 20 July 2017 in relation to the Previously Disclosed Transportation Contracts.

The Company announces that members of the Group entered into new agreements with associates of En+/Mr. Deripaska, pursuant to which the associates of En+/Mr. Deripaska agreed to provide transportation services to the members of the Group (the "New Transportation Contracts”) with major terms set out below:

Note:

1. The service fee is calculated by the estimated demand for transportation services and the cost of services (USD200 for each vehicle per hour) and vehicle-hour cost (USD32.5 per hour without VAT).

2. The service fee is calculated by the estimated demand for transportation services, turnaround time and the cost of transport service, which is USD46.75 per trip/haul cycle without VAT.

The consideration under the New Transportation Contracts is to be paid in cash via wire transfer or by way of bilateral clearing.

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 the financial year ending 31 December 2017, as they were entered into by members of the Group with the associates of En+/Mr. Deripaska, and the subject matter of each contract relates to the provision of transportation services by the associates of En+/Mr. Deripaska to the Group.

The annual aggregate transaction amounts that are payable by the Group to the associates of En+/Mr. Deripaska under the New Transportation Contracts and the Previously Disclosed Transportation Contracts for the financial year ending 31 December 2017 are estimated to be approximately USD22.136 million.

In accordance with the Company’s procurement policies and using tools such as the Company’s procurement portal, the Company invited several organizations to take part in the tender in relation to the required transportation services. The Company’s procurement managers, in line with the best-in-class experience and know-how of the Company’s procurement policies, with approval from the Company bidding committee, chose the contractors offering the best terms and conditions (taking into account the price and available routes) and then entered into the contracts with the chosen service provider.

The contract price under each of 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+/Mr. Deripaska 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 were entered into for the purpose of transporting goods, cargoes and/or 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 and is capable of meeting the Group’s transportation needs.

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 KraMZ-Auto. Mr. Deripaska is also indirectly interested in more than 50% of the issued share capital of En+ and indirectly interested in more than 30% of the issued share capital of Stroyservice. Accordingly, Mr. Deripaska, Mr. Maxim Sokov, Ms. Olga Mashkovskaya and Ms. Gulzhan Moldazhanova did not vote on the Board resolution approving the New Transportation Contract with KraMZ-Auto and Mr. Deripaska did not vote on the Board resolution approving the New Transportation Contract with Stroyservice.

LISTING RULES IMPLICATIONS

KraMZ-Auto is an indirect subsidiary of En+, and is therefore an associate of En+ which is a substantial shareholder of the Company. Accordingly, KraMZ-Auto is a connected person of the Company under the Listing Rules.

Mr. Deripaska is indirectly interested in more than 30% of the issued share capital of Stroyservice. Stroyservice is therefore an associate of Mr. Deripaska. Stroyservice is thus 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 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 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.

REPAIR SERVICES

THE NEW REPAIR SERVICES CONTRACT

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, 25 April 2017, 23 May 2017 and 7 July 2017 in relation to the Previously Disclosed Repair Services Contracts.

The Company announces that on 11 September 2017, a member of the Group entered into agreements with an associate of En+, pursuant to which the associate of En+ agreed to provide repair services to the member of the Group (the "New Repair Services Contracts”), details of which are set out below.

Notes:

1. The consideration is based on the estimated costs per building (including labour costs and the necessary materials) for the relevant repair works (USD 18,952 per building excluding VAT with a total of 16 buildings). The consideration is to be paid in cash via wire transfer or set-off of counter obligations.

2. The consideration is based on equipment repair cost estimates on the basis of direct worker labour hours and the normative cost of one labour hour. Such time input is to be estimated according to methodological and normative documents. The cost of 1 man-hour is up to USD1.88 excluding VAT. The consideration is to be paid in cash via wire transfer or set-off of counter obligations.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

The contract price payable under each of the New Repair 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 repair services of the same type and quality and those offered by the associates of En+ to independent third parties. In accordance with the Company’s procurement policies and using tools such as the Company’s procurement portal, the Company invited several organizations to take part in the tender in relation to the required repair services. The Company’s procurement managers, in line with the best-in-class experience and know-how of the Company’s procurement policies, with approval from the Company’s bidding committee, chose the contractor offering the best terms and conditions (taking into account the price and availability of professionals with the required skill and experience) and then entered into the additional agreements with the chosen contractor.

Based on the terms of the New Repair Services Contracts 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 USD13.396 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 New Repair Services Contracts 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 New Repair Services Contracts are for the benefit of the Company, as the Company requires repair services and the contractor offered a competitive price.

The Directors (including the independent non-executive Directors) consider that the New Repair Services Contracts have been negotiated on an arm’s length basis and on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Repair 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 Repair 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 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 New Repair Services Contracts.

LISTING RULES IMPLICATIONS

Joint-Stock Company "Irkutskenergoremont” 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 Repair Services Contracts 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 New Repair Services Contracts 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.

PURCHASE OF ASSETS

THE NEW PURCHASE OF ASSETS CONTRACT

Reference is made to the announcements of the Company dated 17 June 2016, 29 November 2016, 30 December 2016 and 20 July 2017 in relation to the Previously Disclosed Purchase of Assets Contracts.

The Company announces that the following contract was entered into between a member of the Group, as buyer, and an associate of En+, as seller, pursuant to which the associate of En+ agreed to sell assets to the member of the Group (the "New Purchase of Assets Contract”) with major terms set out below:

Note:

1. The unit price for each anode superstructure with riser is USD178,876.50 per piece.

The consideration under the New Purchase of Assets Contract is to be paid in cash via bank 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 Contract 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 and En+, and the subject matter of each contract relates to the purchase of assets from the associates of Mr. Deripaska and En+ by the Group for the year ending 31 December 2017.

The annual aggregate transaction amounts that are payable by the Group to the associates of Mr. Deripaska and En+ under the New Purchase of Assets Contract and the Previously Disclosed Purchase of Assets Contracts for the financial year ending 31 December 2017 is estimated to be approximately USD8.296 million.

In accordance with the Company’s procurement policies and using tools such as the Company’s procurement portal, the Company invited several organizations to take part in the tender in relation to the purchase of assets. The Company’s procurement managers, in line with the best-in-class experience and know-how of the Company’s procurement policies, with approval from the Company’s bidding committee, chose the contractor as it offered the lowest price for the asset to be purchased, best payment condition, best delivery times and had the necessary equipment and human resources to provide services for the assets.

The contract price under the New Purchase of Assets Contract 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+/Mr. Deripaska to independent third parties. The basis of calculation of payments under the New Purchase of Assets Contract is based on the quotation provided by the supplier based on costs relating to production.

The annual aggregate transaction amount is derived from the total contract price under the New Purchase of Assets Contract, which was based on the amount of assets to be supplied and the respective contract price.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The New Purchase of Assets Contract was entered into for the purpose of purchasing the assets. The Company considers that the transactions contemplated under the New Purchase of Assets Contract are for the benefit of the Company, as the sellers offered the assets to the Group at the lowest price and the quality of the assets satisfies the requirement of the Group.

The Directors (including the independent non-executive Directors) consider that the New Purchase of Assets Contract is on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Purchase of Assets 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 New Purchase of Assets 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 "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 resolution approving the New Purchase of Assets Contract.

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 Contract and the Previously Disclosed Purchase of Assets 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 Purchase of Assets Contract 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.

PRINCIPAL BUSINESS ACTIVITIES

The Company is principally engaged in the production and sale of aluminium, including alloys and value-added products, and alumina.

Stroyservice is principally engaged in the construction, repairing and provision of transportation services.

Limited Liability Company "KraMZ-Auto” is principally engaged in the provision of transportation services.

Joint-Stock Company "Irkutskenergoremont” is principally engaged in activities for supporting of operability of thermal power plants.

LLC "PO KTS” is principally engaged in the production and sale of metal constructions.

DEFINITIONS

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

12 September 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.

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