Steel sector’s privatization in CIS
What is the current state of privatization in the CIS as far as the steel industry is concerned? During August 1994, a 17 percent stake in Novolipetsk Steel (NLMK), one of Russia's largest integrated steel-making companies, was sold through bank CSFB for $1 million. The transaction at the time would equate the company's entire value at paltry $5.9 million. Almost four and a half years later, on December 14, 1998, a 14.84 percent stake owned by the government was sold for $30.8 million. Thus, the cost of enterprise grew had grown to $207.5 million. During August 1995, a 3.05 percent stake in Russian steel producer Magnitogorsk Iron and Steel Works (MMK) was sold for $4.98 million, valuing the company at $166 million. Nine years later, on December 22, 2004; Russian Basic Research Fund sold a 17.84 percent stake in MMK for $790.15 million, thus valuing the company at $4.4 billion. On the Ukrainian front, a 93.02 percent stake in Ukraine's largest steel mill, Kryvorizhstal, was sold to Mittal Steel for $4.8 billion in October 2005. This was the second time the mill went up for auction. As previously reported by SteelOrbis, Kryvorizhstal was sold to two Ukrainian businessmen, Viktor Pinchuk and Rinat Akhmetov, for $800 million in 2004 even though foreign companies had bid nearly twice that for the mill. However, upon complaints filed by various parties, a Ukrainian court ruled that the privatization of Kryvorizhstal was illegal.