UC RUSAL enters into a sale of silicon agreement with Kamensk-Uralsky Metallurgical Works
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United Company RUSAL Plc announces via a press release that, on 14 March 2014, UC RUSAL TH, a member of the Group, as seller, entered into a sale of silicon agreement with Kamensk-Uralsky Metallurgical Works Joint-Stock Company ("OJSC KUMZ"), an associate of SUAL Partners, as buyer, pursuant to which UC RUSAL TH agreed to supply and OJSC KUMZ agreed to purchase silicon at the estimated volume of approximately 300 tons during the year ending 31 December 2014, at the estimated total consideration of approximately USD0.654 million. The consideration is to be 100% pre-paid and satisfied in cash via wire transfer. The term of the agreement is up to 31 December 2014, and will be extended for one year unless any of the parties declares its intention to terminate it.
Based on the terms of the Sale of Silicon Agreement and the Previously Disclosed 2014 Sale of Raw Materials Agreements, the annual aggregate transaction amount that is payable by the associates of Mr. Blavatnik/SUAL Partners to the Group is approximately USD22.135 million for the year ending 31 December 2014. The annual aggregate transaction amount is the maximum amount of consideration payable under the terms of the terms of the Sale of Silicon Agreement and the Previously Disclosed 2014 Sale of Raw Materials Agreements based on the delivery volume for the year ending 31 December 2014 estimated by the Directors and the demand from the buyers.
The Directors consider that the transactions contemplated under the Sale of Silicon Agreement are for the benefit of the Company as the silicon supplied under the agreement was the current excess raw materials unused by the Group, and that the silicon sold under the Sale of Silicon Agreement was required under the regulation of the Federal Antimonopoly Service to meet the demand of domestic customers.
SUAL Partners, being a substantial shareholder of the Company, has a controlling interest of more than 30% in OJSC KUMZ. Accordingly, OJSC KUMZ is an associate of SUAL Partners and thus is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the Sale of Silicon Agreement constitute continuing connected transactions of the Company.
