Tempers Ran High

KIEV, Ukraine -- Kiev Court of Appeal upheld yesterday the award of the Business Court that invalidated Krivorozhstal privatization. Owner of 93.02 percent in Krivorozhstal, Investment and Metallurgical Union (IMU) was denied revision of award. On the other hand, the Ukrainian authorities might be just trying to negotiate more advantageous terms of the amicable agreement.


Viktor Pinchuk (L) and Rinat Akhmetov
Kiev Court invalidated Krivorozhstal privatization April 22. IMU bought out last June 93.02 percent in the company for $804 million. Russian Severstal Group and Evrazholding had offered more than $1 billion, transnational Mittal Steel – over $2 billion but were unable to bid.

IMU is controlled by Donetsk businessman Rinat Akhmetov and Viktor Pinchuk, son-in-law of the Ukrainian former president Leonid Kuchma.

2004 revenues of Krivorozhstal reached $1.9 billion.

IMU challenged the award in the Court of Appeal but its motion was overruled. Now the consortium intends to go to the Supreme Business Court.

The court seized Krivirozhstal stocks and banned IMU to make any transactions with them or dispose of Krivorozhstal assets.

IMU spokesman Alexey Reznikov said the actual target of the award that invalidated Krivorozhstal privatization is to win more advantageous terms of the deal for the government.

Viktor Pinchuk told Kommersant he is ready to put forward several drafts of the amicable agreement that could interest the government but denied to specify them before official talks with the authorities are launched. Pinchuk said his Nikopolsky Works of Ferroalloys is eyed by Privat Group (partner of Alisher Usmanov), so he forecasts one more attack on his property.

Ukrainian President Viktor Yushchenko backs up the amicable agreement on Krivorozhstal but insists on transparency of the talks.

Nearly all potential bidders of last year’s tenders – Severstal, Evrazholding and Mittal Steel and Indian Tata Group have announced they will bid for Krivorozhstal again.

Source: Kommersant