United RUSAL : CONTINUING CONNECTED TRANSACTIONS HEAT SUPPLY CONTRACT AND REPAIR SERVICES CONTRACT

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UNITED COMPANY RUSAL PLC

(Incorporated under the laws of Jersey with limited liability)

(Stock Code: 486)

CONTINUING CONNECTED TRANSACTIONS

HEAT SUPPLY CONTRACT AND

REPAIR SERVICES CONTRACT

Reference is made to the announcements of the Company dated 30 December 2016, 28 February 2017, 29 December 2017, 2 February 2018 and 28 December 2018 in relation to the Previously Disclosed Heat Supply Contracts, and the announcements of the Company dated 11 December 2017, 15 February 2018, 2 March 2018, 27 December 2018, 18 January 2019, 12 April 2019 and 30 April 2019 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 an associate of En+ agreed to supply heat energy to the member of the Group (the "New Heat Supply Contract").

The Company announces that a member of the Group entered into a contract 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 Contract").

THE NEW HEAT SUPPLY CONTRACT

Reference is made to the announcements of the Company dated 30 December 2016, 28 February 2017, 29 December 2017, 2 February 2018 and 28 December 2018 in relation to the Previously Disclosed Heat Supply Contracts.

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The Company announces that a member of the Group has entered into the New Heat Supply Contract, details of which are set out below:

						Estimated
						consideration
						payable for
					Estimated	the year
					amount of	ending 31
					heat to be	December
	Purchaser				supplied for	2019
Date of the	(member of	Supplier	Term of	Form of	each year	excluding
contract	the Group)	(associate of En+)	contract	heat	(approximate)	VAT (USD)	Payment terms
22 May 2019	Limited	Limited Liability	Up to 31	Heat energy	Gcal /sq. m.-	29,450	On or before the 18th
	Liability	Company	December		1,259	(Note 1)	day of the current
	Company	"Irkutskenergosbyt"	2019				accounting period, the
	"United	(Note 2)					consumer shall pay
	Company						35% of the heat
	RUSAL Anode						energy cost as
	Plant"						approved by the
							parties; on or before
							the last day of the
							current accounting
							period the consumer
							shall pay 50% of the
							heat energy cost as
							approved by the
							parties; on or before
							the 10th day of the
							month following the
							accounting period, the
							consumer shall pay
							the balance between
							of actual consumed
							heat energy as
							registered by metering
							instruments readings
							or based on the
							calculation if a
							metering instrument is
							not available, and the
							amount already paid
							by the consumer
Total						29,450
estimated
consideration
payable
(USD)

Note:

1. The thermal energy rate is in accordance with the thermal energy tariff. The price of the New Heat Supply Contract is stated in accordance with the Order of Irkutsk Regional Tariff Authority dated 30 November 2017. The thermal energy tariff for 2019 is USD28.08/Gcal.
2. Limited Liability Company "Irkutskenergosbyt" signed the contract as agent of JSC "Baikalenergo" which will supply the heat energy.

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The consideration under the New Heat Supply Contract will be settled 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 Heat Supply Contract and the Previously Disclosed Heat Supply Contracts should be aggregated, as they were entered into by members of the Group with 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 Contract and the Previously Disclosed Heat Supply Contracts for the financial year ending 31 December 2019 is estimated to be approximately USD9.823 million.

As no other party participated in the open bidding procedure, the New Heat Supply Contract was entered into with Limited Liability Company "Irkutskenergosbyt", agent of JSC "Baikalenergo" which is the supplier of last resort in the Irkutsk region.

The contract price of the New Heat Supply Contract has been arrived 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 Contract 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 Contract have been 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 Contract is for the benefit of the Company as there is no alternative supplier available in the region.

The Directors (including the independent non-executive Directors) consider that the New Heat Supply Contract is on normal commercial terms which are fair and reasonable and the transactions contemplated under the New Heat Supply 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.

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None of the Directors has a material interest in the transactions contemplated under the New Heat Supply Contract, save for Mr. Christopher Burnham and Mr. Nick Jordan who are directors of En+, and Mr. Vyacheslav Solomin who is the chief operating officer of En+, which holds more than 30% of the issued share capital of Limited Liability Company "Irkutskenergosbyt". Accordingly, Mr. Christopher Burnham, Mr. Nick Jordan and Mr. Vyacheslav Solomin did not vote on the Board resolution approving the New Heat Supply Contract.

LISTING RULES IMPLICATIONS

Limited Liability Company "Irkutskenergosbyt" 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 in turn is a substantial shareholder of the Company. Accordingly, Limited Liability Company "Irkutskenergosbyt" is a connected person of the Company under the Listing Rules. The transactions contemplated under the New Heat Supply Contract therefore constitute continuing connected transactions of the Company.

The estimated annual aggregate transaction amount of the continuing connected transactions under the New Heat Supply Contract and the Previously Disclosed Heat Supply Contracts for the financial year ending 31 December 2019 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 Contract 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.

THE NEW REPAIR SERVICES CONTRACT

Reference is made to the announcements of the Company dated 11 December 2017, 15 February 2018, 2 March 2018, 27 December 2018, 18 January 2019, 12 April 2019 and 30 April 2019 in relation to the Previously Disclosed Repair Services Contracts. The Company announces that a member of the Group entered into a contract 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 Contract"), with details as below.

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					Estimated
					consideration
					payable for the
					year ending 31
					December 2019
	Customer (member	Contractor (associate	Term of		excluding VAT
Date of the contract	of the Group)	of En+)	contract	Repair services	(USD)	Payment terms
22 May 2019	Joint stock company	JSC "Baikalenergo"	Up to 31	Providing	112,673	Payment to be
	"RUSAL		December	service to the	(Note 1)	made within 60
	Sayanogorsk		2019	external heat		calendar days
	Smelter"			networks and		after receipt of the
				industrial plant		documented
				wiring at JSC		original invoices
				"RUSAL		corresponding to
				Sayanogorsk"		the certificates of
						acceptance signed
						by both parties
Total estimated					2019: 112,673
consideration
payable (USD)

Note:

1. The estimated consideration payable is calculated based on the estimated costs for the relevant repair works of USD4.55/hour and is to be paid in cash via bank transfer or set-off of mutual obligations. The planned hours of work in 2019 are 24,777.05 man hours.

THE ANNUAL AGGREGATE TRANSACTION AMOUNT

The contract price payable under the New 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. 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 (the contractor offered the lowest price) and then entered into the contract with the chosen contractor.

Based on the terms of the New 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 ended 31 December 2019 is estimated to be approximately USD13.903 million.

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.

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