Ukraine threatens Mittal Steel

The State Property Fund of Ukraine (SPFU) threatens to challenge the acquisition of ’Kryvorizstal' by Mittal Steel due to non-fulfillment of the investment obligations. The SPFU, after the check up of the fulfillment of Kryvorizstal sale contract's obligations during April 14-25, announced that it would challenge the acquisition in the court if Mittal Steel Germany would not fulfill the investment obligations in a month time. In November 2005, Mittal Steel Germany, a daughter company of Mittal Steel, has acquired 93.2 percent of Ukraine's state owned Kryvorizstal, renaming it as Mittal Steel Krivoy Rog. Mittal Steel Germany not only paid the highest price for the enterprise but also agreed to implement a number of investment obligations, particularly the social obligations. In March 2006, the SPFU issued a check up on implementation of social obligations at Mittal Steel Krivoy Rog. As a result the SPFU discovered a number of non-fulfilled obligations including below minimum level wage rates and non payment of so-called ’thirteen salary'.