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
REPAIR SERVICES CONTRACTS
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, 30 April 2019, 23 May 2019 and 2 July 2019 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that the members of the Group entered into the contracts with the 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
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, 30 April 2019, 23 May 2019 and 2 July 2019 in relation to the Previously Disclosed Repair Services Contracts. The Company announces that the members of the Group entered into the contracts with the 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.
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Estimated | |||||||
consideration | |||||||
payable for the | |||||||
Customer | year ending 31 | ||||||
Date of the | (member of the | Contractor | Term of | December 2019 | |||
contract | Group) | (associate of En+) | contract | Repair services | excluding VAT | Payment terms | |
(USD) | |||||||
1 | 10 July 2019 | RUSAL | JSC | Up to 31 | Services for | 2,924,206 | Prepayment of 50% |
Achinsk | "Bratskenergoremont" | December | works on | (Note 1) | of the works made | ||
2019 | overhaul of the | according to the | |||||
boiler #3 | monthly financial | ||||||
schedule, and the | |||||||
final payment of | |||||||
50% made within 10 | |||||||
calendar days of | |||||||
receipt of the | |||||||
original invoice | |||||||
2 | 10 July 2019 | Joint stock | Limited Liability | Up to 31 | Providing | 11,991 | Payment within 60 |
company | Company "Khakassia | December | monthly service | (Note 2) | calendar days after | ||
"RUSAL | Utilities" | 2019 | to the external | receipt of the | |||
Sayanogorsk | heat networks | documented original | |||||
Smelter" | and industrial | invoices | |||||
plant wiring at | corresponding to the | ||||||
JSC "RUSAL | certificates of | ||||||
Sayanogorsk" | acceptance signed | ||||||
by both parties | |||||||
Total estimated | 2019: | ||||||
consideration | 2,936,197 | ||||||
payable (USD) |
Notes:
- The estimated consideration payable is calculated based on the estimated costs for the relevant repair works and is to be paid in cash via bank transfer.
- The estimated consideration payable is calculated based on the costs of the contractor's work based on man-hour costs at a rate of USD4.97 per man-hour plus the costs of materials consumed and the scope of works performed, and is to be paid in cash via bank transfer or set off of mutual obligations. The estimated planned hours of work for 2019 are approximately 2,411 man-hours.
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. 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
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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, is currently carrying out similar works and has the relevant experience) and then entered into the contract 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 ended 31 December 2019 is estimated to be approximately USD16.902 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.
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 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. Christopher Burnham and Mr. Nick Jordan who are directors of En+, 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+, which holds more than 30% of the issued share capital of Joint-Stock Company "Irkutskenergoremont". Mr. Vladimir Kolmogorov is also the head of technical supervision of JSC EuroSibEnergo, a company which is owned by En+. Accordingly, Mr. Christopher Burnham, Mr. Nick Jordan, Mr. Vyacheslav Solomin and Mr. Vladimir Kolmogorov did not vote on the Board
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resolution approving the New Repair Services Contract number 1 in the table above (which was approved by the Board in June 2019); whereas Mr. Christopher Burnham, Mr. Nick Jordan and Mr. Vyacheslav Solomin did not vote on the Board resolution approving the New Repair Services Contract number 2 in the table above (which was approved by the Board in March 2019).
LISTING RULES IMPLICATIONS
Each of JSC "Bratskenergoremont" and Limited Liability Company "Khakassia Utilities" is held by En+ 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, each of JSC "Bratskenergoremont" and Limited Liability Company "Khakassia Utilities" 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 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 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.
PRINCIPAL BUSINESS ACTIVITIES
The Company is principally engaged in the production and sale of aluminium, including alloys and value-added products, and alumina.
JSC "Bratskenergoremont" is principally engaged in activities for supporting of operability of the equipment, production of electric installation, all-construction works and others.
Limited Liability Company "Khakassia Utilities" is principally engaged in generating heat and electricity, the production, transmission and distribution of steam and hot water (thermal energy), and activities for ensuring operability of boiler rooms of thermal power plants.
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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 Plc, formerly 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 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 associates of En+, pursuant to which |
Contracts" | the associates of En+ agreed to provide repair |
services to the members of the Group during the | |
financial year 2019, as disclosed in the | |
announcements of the Company dated 11 December | |
2017, 15 February 2018, 2 March 2018, 27 | |
December 2018, 18 January 2019, 12 April 2019, | |
30 April 2019, 23 May 2019 and 2 July 2019. | |
"substantial shareholder" | has the same meaning ascribed thereto under the |
Listing Rules. |
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United Company RUSAL plc published this content on 11 July 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 July 2019 01:07:07 UTC