UNITED COMPANY RUSAL, INTERNATIONAL 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 SERVICESReference is made to the announcement of the Company dated 2 July 2015 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that members of the Group entered into contracts / additional agreements with associates of En+, pursuant to which the associates of En+ agreed to provide repair services to the members of the Group.
THE REPAIR SERVICES CONTRACTSReference is made to the announcement of the Company dated 2 July 2015 in relation to the Previously Disclosed Repair Services Contracts.
The Company announces that members of the Group entered into contracts / additional agreements with associates of En+, pursuant to which the associates of En+ agreed to provide repair services to the members of the Group (the "Repair Services Contracts"), details of which are set out below.
No. | Date of contract/ additional agreement | Customer (member of the Group) | Contractor (associate of En+) | Term of contract/ additional agreement | Repair services | Estimated consideration payable for the year ending 31 December 2017 excluding VAT (USD) | Payment terms |
1. | Contract dated 23 January 2017 | JSC RUSAL Achinsk | Bratskenergoremont | Up to 31 December 2017, may be extended by an addendum | Maintenance services of CHP equipment | 5,795,899 (Note 1) | A prepayment of 50% of the consideration shall be paid according to the monthly financial schedule set out in the contract until the 5th day of the month, the remaining 50% to be paid within 10 calendar days after receiving of the original invoice |
2. | Additional agreement dated 28 December 2016, which is an additional agreement to the contract dated 4 July 2016 | JSC RUSAL Achinsk | Bratskenergoremont | Up to 30 June 2017 | Capital repair of boiler | 536,421 | A prepayment of 50% of the consideration shall be paid according to the monthly financial schedule set out in the contract until the 5th day of the month, the remaining 50% to be paid within 10 calendar days after receiving of the original invoice |
3. | Contract dated 28 December 2016 | JSC RUSAL Achinsk | Bratskenergoremont | Up to 31 December 2017 | Technological cleaning of boiler | 150,539 | Within 15 calendar days after receipt of the original invoice |
4. | Contract dated 23 January 2017 | JSC RUSAL Achinsk | Bratskenergoremont | Up to 30 June 2017 | Extra work during the overhaul of boiler | 660,044 | A prepayment of 50% of the consideration shall be paid according to the monthly financial schedule set out in the contract until the 5th day of the month, the remaining 50% to be paid within 10 calendar days after receiving of the original invoice |
No. | Date of contract/ additional agreement | Customer (member of the Group) | Contractor (associate of En+) | Term of contract/ additional agreement | Repair services | Estimated consideration payable for the year ending 31 December 2017 excluding VAT (USD) | Payment terms |
5. | Contract dated 10 January 2017 | Open Joint-Stock Company "RUSAL Bratsk Aluminium Smelter" | Joint-Stock Company "Irkutskenergoremont" | Up to 31 December 2017 | Production equipment maintenance and repair works | 1,303,891 (Note 2) | Within 40 calendar days after the signing of the Performed Works Certificate based on the invoice |
6. | Contract dated 10 January 2017 | Limited Liability Company "Russian Engineering Company | Joint-Stock Company "Irkutskenergoremont" | Up to 31 December 2017 | Production equipment maintenance and repair works | 627,638 (Note 3) | Within 40 calendar days after the signing of the Performed Works Certificate based on the invoice |
Total estimated consideration payable for the year 2017 | 9,074,432 |
Notes:
The estimated consideration payable is calculated on the basis of labour cost which is estimated at USD8.48 per hour (excluding VAT).
The estimated consideration payable is calculated on the basis of labour cost which ranges from USD3.38 to USD3.99 per hour (excluding VAT).
The estimated consideration payable is calculated on the basis of labour cost which ranges from USD3.38 to USD3.99 per hour (excluding VAT).
The consideration under the Repair Services Contracts is to be paid in cash via wire transfer or set-off.
THE ANNUAL AGGREGATE TRANSACTION AMOUNTThe contract price payable under the 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. The basis of
calculation of payments under the Repair Services Contracts is the price of contract offered by the associates of En+ which is based on the estimated costs (including labour costs and the necessary materials) for the relevant repair works. The Company invited several organizations to take part in the tender in relation to the required repair services and chose the contractor offering the best terms and conditions (taking into account the price, quality offered by the contractor and availability of professionals with the required skill and experience) and then entered into the contract/additional agreement with the chosen contractor.
Based on the terms of the 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 USD9.088 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 APPROACHPursuant to Rule 14A.81 of the Listing Rules, the continuing connected transactions contemplated under the 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 TRANSACTIONSThe Directors consider that the 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 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 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 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 each of Bratskenergoremont and Joint-Stock Company
United Company RUSAL plc published this content on 24 January 2017 and is solely responsible for the information contained herein.
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