The Ukrainian mining and steel producing company Metinvest Holding (Metinvest) has announced its decision to combine its assets with Ukrainian steelmaker Ilyich Iron and Steel Works of Mariupol (Ilyich), with its share in this partnership comprising 75 percent on completion of the integration process, whereas 25 percent will remain under control of Ilyich under the leadership of the plant's current CEO Vladimir Boyko.
Accordingly, this partnership will involve all assets of Ilyich steel plant and enterprises of Metinvest Group, including Inguletskiy GOK, Krasnodoncoal, Avdeyevka Coke & Chemical Plant, Khartsyzsk pipe plant, as well as investments in the development and modernizing of Ilyich's production facilities with expenditure of $2 billion. The integration will result in a total production capacity of 20 million mt of steel per annum.
One of the first steps in the course of the partnership will involve the participation of Metinvest Group in the acquisition of additionally issued of shares of Ilyich Stal and Ilyich steel plant.
The next steps and final format of the partnership will be determined following the completion of due diligence and receipt of approvals from the corresponding regulatory Ukrainian and international authorities.
"Partnership with Ilyich is an important phase in the implementation of our long-term strategy aimed at strengthening Metinvest's vertical integration and achieving maximum growth in high quality, while at the same time increasing low cost steel volumes in Ukraine," Metinvest Holding's CEO Igor Syry commented, adding that the partnership will allow the strengthening of the position of Ukrainian metallurgy in the world markets, which is the foundation for Ukrainian economic growth and for increasing Ukraine's economic security.
Meanwhile, Ilyich will in turn secure stable iron ore and coke supplies which have been an issue in the past.