UC RUSAL’s statement in connection with the approval of share buyback by the board of MMC Norilsk Nickel

　　Moscow, 15 August 2011 – UC RUSAL (SEHK: 486, EuroNext: RUSAL/RUAL, MICEX: RUALR, RTS: RUAL), the world’s largest aluminium producer and owner of a 25% stake in MMC Norilsk Nickel, considers that today’s decision by the Board of Directors of Norilsk Nickel to approve a share buyback is not aimed at meeting the interests of all the shareholders of the company, but exclusively those of the Interros group.

 

　　The Board of Directors instructed the management of MMC to make another offer to RUSAL to acquire its stake before announcing the buyback offer to all the shareholders, which further proves that the proposed buyback was not initially intended at increasing the company’s capitalization, as stated by Interros, but has a goal of obtaining a full control over MMC and its cash flows by Interros using the balance sheet of Norilsk Nickel.

 

　　Interros in this situation either aims to buy RUSAL’s stake using the cash of MMC, or, in case of RUSAL’s refusal to sell its stake, to sell back to MMC its shares bought earlier this year, fixing a significant profit from such operation. Norilsk Nickel’s loss arising from the sale of quasi-treasury shares and following buybacks, which led to these shares being sold back to MMC, can reach over USD 1 billion.

 

　　RUSAL is not the only entity that considers Interros’ transactions irregular. Auditors KPMG were not able to identify the beneficial owners of the companies Delmonico Group Ltd and Crelios Investments Ltd, who purchased the quasi-treasury shares from MMC’s subsidiaries. Trafigura, which allegedly bought the quasi-treasury shares of MMC in December 2010, also did not confirm that these companies acted on its behalf. In this situation, both companies, Delmonico Group Ltd and Crelios Investments Ltd, were urgently liquidated on 4 August 2011, with a liquidation request for both companies filed on 19 July 2011. It also should be mentioned that these companies were liquidated by lawyers of the Cyprus service company Chrysses Demetriades & Co. that also serves about 30 companies of Interros Group. RUSAL presumes that the urgency of liquidation of the companies allegedly owned by Trafigura was caused by intention to suppress evidences of buy-back operations in the beginning of the current year and upcoming questions regarding the affiliation of the mentioned companies with Interros that resulted in qualified opinion in KPMG Auditor's Report. Norilsk Nickel finances these transactions with the funds that are to be used for the development of the company.

 

　　In these circumstances, RUSAL will defend its rights by any legal means, including criminal prosecution of Interros and the management of MMC.