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
TRANSPORTATION CONTRACT AND
REPAIR SERVICES CONTRACTS
Reference is made to the announcements of the Company dated 29 December 2017, 19 January 2018, 2 February 2018 and 30 December 2019 in relation to the Previously Disclosed Transportation Contracts, and the announcements of the Company dated 2 March 2018, 24 December 2019, 30 December 2019, 14 January 2020, 28 April 2020, 15 May 2020 and 30 June 2020 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that a member of the Group has entered into a contract with an associate of En+, pursuant to which the associate of En+ agreed to provide transportation services to the member of the Group (the "New Transportation Contract").
The Company further announces that members of the Group have entered into contracts with associates of En+, pursuant to which the associates of En+ agreed to supply repair services to the members of the Group (the "New Repair Services Contracts").
THE NEW TRANSPORTATION CONTRACT
Reference is made to the announcements of the Company dated 29 December 2017, 19 January 2018, 2 February 2018 and 30 December 2019 in relation to the Previously Disclosed Transportation Contracts.
− 1 −
The Company announces that a member of the Group has entered into the New Transportation Contract with major terms set out below:
Estimated | ||||||
consideration | ||||||
payable for the | ||||||
year ending 31 | ||||||
Customer | December 2020 | Scheduled | ||||
Date of the | (member of the | Service provider | excluding VAT | termination | ||
contract | Group) | (associate of En+) | Service | (USD) | date | Payment terms |
23 July 2020 | "RUSAL ETC" | KraMZ-Auto LLC | Transportation | 14,978 | Up to 15 | Payment is made within |
LLC | of goods | (Note 1) | January 2021 | 10 calendar days after | ||
signing the certificate | ||||||
of services rendered and | ||||||
the issued invoice | ||||||
Total estimated | 14,978 | |||||
consideration | ||||||
payable | ||||||
(USD) |
Note:
1. The basis of calculation is determined by the price for planned services (between USD20.6 to USD25.7 per car hour).
The consideration under the New Transportation 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 transactions contemplated under the New Transportation Contract and the Previously Disclosed Transportation Contracts should be aggregated for the financial year ending 31 December 2020 as they were entered into by members of the Group with 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 Contract and the Previously Disclosed Transportation Contracts for the financial year ending 31 December 2020 is estimated to be approximately USD20.482 million.
The Company's procurement managers, in line with the best-in-class experience and know-how of the Company's procurement policies, chose the contractor offering the best terms and conditions (the contractor offered the lowest price and was able to provide all necessary services) and then entered into the contract with the chosen contractor.
− 2 −
The contract price of the New Transportation 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 transportation services of the same type and quality and those offered by the associate of En+ to independent third parties. The annual aggregate transaction amount is derived from the total contract price under the New Transportation Contract, 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 Contract was entered into for the purpose of transportation. The Company considers that the transactions contemplated under the New Transportation Contract are for the benefit of the Company, as the services provided are required in the production process of the Group and the service provider is capable of meeting the Group's transportation needs.
The Directors (including the independent non-executive Directors) consider that the New Transportation Contract is on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Transportation 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 Transportation Contract, save for Mr. Vyacheslav Solomin, who is the chief operating officer of En+, and Mr. Vladimir Kolmogorov, who is the first deputy chief executive officer for technical policy of En+ and deputy CEO - executive officer of En+, being the holding company of KraMZ-Auto LLC. Mr. Vladimir Kolmogorov is also the head of technical supervision of JSC EuroSibEnergo, a company which is owned by En+. Accordingly, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov did not vote on the Board resolution approving the New Transportation Contract.
LISTING RULES IMPLICATIONS
The ultimate beneficial owner of KraMZ-Auto LLC is En+, which holds more than 90% of the issued share capital of this entity.
KraMZ-Auto LLC is an indirect subsidiary of En+, and is therefore an associate of En+, which in turn is a substantial shareholder of the Company. Accordingly, KraMZ-Auto LLC is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the New Transportation Contract constitute continuing connected transactions of the Company.
− 3 −
The estimated annual aggregate transaction amount of the continuing connected transactions under the New Transportation Contract and the Previously Disclosed Transportation Contracts for the financial year ending 31 December 2020 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 Contract 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.
THE NEW REPAIR SERVICES CONTRACTS
Reference is made to the announcements of the Company dated 2 March 2018, 24 December 2019, 30 December 2019, 14 January 2020, 28 April 2020, 15 May 2020 and 30 June 2020 in relation to the Previously Disclosed Repair Services Contracts. The Company announces that members of the Group entered into contracts with associates of En+, pursuant to which the associates of En+ agreed to provide repair services to the members of the Group (the "New Repair Services Contracts"), with details as below.
Estimated | |||||||
consideration | |||||||
payable for the | |||||||
Date of the | Customer | year ending 31 | |||||
contract/ | (member | December 2020 | Scheduled | ||||
additional | of the | Contractor | excluding VAT | termination | |||
agreement | Group) | (associate of En+) | Repair services | (USD) | date | Payment terms | |
1 | 23 July 2020 | LLC | KraMZ-Auto LLC | Provision of | 5,177 | 31 December | 10 calendar days |
"K&K" | special-purpose | (Note 1) | 2020 | from receipt of | |||
machinery | original invoice. | ||||||
2 | 23 July 2020 | JSC | LLC | Transformer | 45,199 | 31 December | Payment in 60 days |
«Kremniy» | "Irkutskenergoremont" | repair services | (Note 2) | 2020 | after receiving | ||
invoice for services | |||||||
provided. | |||||||
Total estimated | 50,376 | ||||||
consideration | |||||||
payable (USD) |
− 4 −
Notes:
- The basis of calculation is determined by the price per unit of product/service (vehicle-mounted crane of 25 tonnes with a handling capacity 203 hours).
- The estimated payable consideration is calculated based on the estimated costs.
The consideration under the New Repair Services Contracts will be settled in cash via bank transfer or set-off of mutual obligations.
THE ANNUAL AGGREGATE TRANSACTION AMOUNT
The contract price payable under 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.
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 ended 31 December 2020 is estimated to be approximately USD14.544 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 repair services. The Company's procurement managers, in line with the best-in-class experience and know-how of the Company's procurement policies, chose the contractor offering the best terms and conditions (the contractor offered the lowest price, has qualified specialists, currently carries similar works and equipment available and members of the Group had a positive work experience previously with the contractor) and then entered into the contract with the chosen contractor.
The annual aggregate transaction amount by the Group 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.
− 5 −
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 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. Vyacheslav Solomin, who is the chief operating officer of En+, and Mr. Vladimir Kolmogorov, who is the first deputy chief executive officer for technical policy of En+ and deputy CEO - executive officer of En+, being the holding company of each of LLC "Irkutskenergoremont" and KraMZ-Auto LLC Mr. Vladimir Kolmogorov is also the head of technical supervision of JSC EuroSibEnergo, a company which is owned by En+. Accordingly, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov did not vote on the Board resolution approving the New Repair Services Contracts.
LISTING RULES IMPLICATIONS
The ultimate beneficial owner of each of LLC "Irkutskenergoremont" and KraMZ-Auto LLC is En+, which holds more than 90% of the issued share capital of each of these entities.
Each of LLC "Irkutskenergoremont" and KraMZ-Auto LLC is an indirect subsidiary of En+, and is therefore an associate of En+ which in turn is a substantial shareholder of the Company. Accordingly, each of LLC "Irkutskenergoremont" and KraMZ-Auto LLC 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 2020 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.
− 6 −
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.
PRINCIPAL BUSINESS ACTIVITIES
The Company is principally engaged in the production and sale of aluminium, including alloys and value-added products, and alumina.
KraMZ-Auto LLC is principally engaged in the provision of transportation services.
LLC "Irkutskenergoremont" is principally engaged in activities for supporting of operability of thermal power plants.
En+ is a leading international vertically integrated aluminium and hydropower producer.
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 of Hong Kong Limited. | |
"connected person(s)" | has the same meaning ascribed thereto under the |
Listing Rules. | |
"continuing connected | has the same meaning ascribed thereto under the |
transactions" | Listing Rules. |
"Director(s)" | the director(s) of the Company. |
"En+" | EN+ GROUP International public joint-stock |
company, a company registered in accordance with | |
the procedure established by the laws of the | |
Russian Federation, in accordance with the Federal | |
Law of the Russian Federation "On International | |
Companies", and which is a Shareholder of the | |
Company. |
− 7 −
"Group" | the Company and its subsidiaries. |
"Listing Rules" | the Rules Governing the Listing of Securities on |
the Stock Exchange of Hong Kong Limited. | |
"percentage ratios" | the percentage ratios under Rule 14.07 of the |
Listing Rules. | |
"Previously Disclosed | the repair services contracts between members of |
Repair Services | the Group and the associates of En+, pursuant to |
Contracts" | which the associates of En+ agreed to provide |
repair services to members of the Group, as | |
disclosed in the announcements of the Company | |
dated 2 March 2018, 24 December 2019, 30 | |
December 2019, 14 January 2020, 28 April 2020, | |
15 May 2020 and 30 June 2020. | |
"Previously Disclosed | the series of transportation contracts between |
Transportation Contracts" | 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, as disclosed in the announcements of the | |
Company dated 29 December 2017, 19 January | |
2018, 2 February 2018 and 30 December 2019. | |
"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 | |
24 July 2020 |
As at the date of this announcement, the executive Directors are Mr. Evgenii Nikitin, Mr. Evgeny Kuryanov and Mr. Evgenii Vavilov, the non-executive Directors are Mr. Marco Musetti, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov and the independent non-executive Directors are Dr. Elsie Leung Oi-sie, Mr. Dmitry Vasiliev, Mr. Bernard Zonneveld (Chairman), Dr. Evgeny Shvarts, Mr. Randolph N. Reynolds, Mr. Kevin Parker, Mr. Christopher Burnham and Mr. Nick Jordan.
All announcements published by the Company are available on its website under the links http://www.rusal.ru/en/investors/info.aspx and http://rusal.ru/investors/info/moex/ , respectively.
− 8 −
Attachments
- Original document
- Permalink
Disclaimer
United Company RUSAL plc published this content on 24 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2020 00:25:02 UTC