Will Pinchuk lose Nikopol Ferroalloy Plant?
Ukrainian metallurgical magnate and the ex-presidents son-in-law, Victor Pinchuk, can be deprived of a substantial part of his assets in the near future. The Attorney General's Office of
Ukraine filed an action to acknowledge the two-year-old sale of Nikopol Ferroalloy Plant to Victor Pinchuk as ineffective. Kiev's court of economic law recently found the privatization of Krivorozhstal (Krivoy Rog Metallurgical Plant) by the Investment-Metallurgical Union to be illegal. On Friday, the court of economic law ordered
Ukraine's Government Property Fund to cancel the transaction with Krivorozhstal. The Investment-Metallurgical Union consortium has 10 days to file an appeal. The group's lawyers stated that an appeal will be filed, but the government assured that the verdict will remain valid. Also on April 22, the Attorney General's Office filed an action with Kiev's court of economic law to acknowledge the illegitimacy of the Nikopol Ferroalloy Plant sale. Pridneproviye, a consortium controlled by Pinchuk's Interpipe, obtained 51% of the plants assets in June 2003 for about $40 million. Pinchuk's structures control a total of around 75% of the plants assets. Experts believe that several Russian metallurgical companies, including
Mechel, Evrazholding and
Severstal, are interested in a controlling block of shares in Nikopol Ferroalloy Plant. Nikopol is one of the largest manganese ferroalloy producers in the world with a
production capacity of 1.2 million tons. Gains in 2004 amounted to $400 million with $14 million of clean profit.