United Company RUSAL, international public joint-stock company (RUSAL), has announced two supplementary agreements with En+ Group affiliates for the provision of electrical-grid connection services to its subsidiaries in the Irkutsk region of Russia.
Key Transaction Details • Contract Parties: – Joint Stock Company “RUSAL Bratsk Aluminium Smelter” and EN+ HYDRO LLC (supplementary to the original 19 Mar 2024 agreement). – LLC “Engineering and Construction Company” and JSC “Irkutsk Electronetwork Company” (supplementary to the original 24 Jun 2022 agreement).
• Purpose: Settlement of incremental value-added tax (VAT) arising from Russia’s VAT increase to 22%. Both contracts enable technological connection of power-receiving equipment and construction facilities to the regional electrical grid—essential for RUSAL’s aluminium operations and the “Rusal Kvartal” employee housing programme.
• Financial Commitments: The supplementary agreements do not add new service fees; they address only the VAT differential. Payments scheduled: – 2026: USD0 – 2027: USD0 for Contract 1; USD23,437 and USD16,660 of additional VAT under Contracts 1 and 2 respectively, payable within 30 days of certified completion.
Annual Caps and Aggregation In line with Hong Kong Listing Rule 14A.68(4), RUSAL has set aggregate annual caps—including these new and previously disclosed grid-connection contracts—with En+ associates at USD16.25 million for the year ending 31 Dec 2026 and USD0.16 million for 2027. Transactions are aggregated under Rule 14A.81 as they involve the same connected counterparties and identical service nature.
Regulatory & Governance Framework • Listing Compliance: Applicable percentage ratios for 2026 exceed 0.1% but remain below 5%; therefore, the transactions require announcement and annual review but are exempt from circular and independent shareholders’ approval. • Internal Controls: RUSAL employs an Automated Transaction Monitoring System and designated “curators” to track connected-party dealings, ensuring caps are not breached. External auditors provide annual verification. • Board Approval: All directors, except Mr. Vladimir Kolmogorov—who holds positions within En+—approved the agreements after determining terms were arm’s-length, market-based and in shareholders’ best interests.
Strategic Rationale The Irkutsk region’s grid infrastructure is controlled by the En+ group, leaving no alternative suppliers for mandatory power connections. Securing these services safeguards energy supply for the Bratsk Aluminium Smelter and supports the “Rusal Kvartal” housing initiative, aligning with RUSAL’s operational continuity and social commitments.
Company Overview RUSAL is a leading vertically integrated aluminium producer involved in bauxite mining, alumina refining, primary and value-added aluminium production, leveraging renewable energy. Counterparty EN+ Group is a major international aluminium and hydropower producer; its subsidiaries EN+ HYDRO LLC and JSC “Irkutsk Electronetwork Company” provide electricity generation and grid connection services, respectively.
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