Tag: Ukraine

Ukrainian Billionaire Akhmetov Tries For Another Steel Mill

On Jun 17 2010

After recently losing Ukraine’s fourth largest steelmaker, Zaporizhstal, to an unnamed group of Russian investors, Rinat Akhmetov, Ukraine’s wealthiest (with a fortune estimate by Forbes at $5.2 billion) is at it again.

Akhmetov’s Metinvest, Ukraine’s largest vertically integrated steel group, is negotiating a merger with Mariupol Ilyich Steelworks, the country’s largest flat rolled steel producer.

According to a note from financial services firm, Millenium Capital, the merger is a win-win for both parties and will help Akhmetov as he tries to take Metinvest public. “[Mariupol] will get access not only to the raw materials but also to the Group financial resources for modernization implementation and will improve the corporate governance too. On the other hand, Metinvest will also benefit from the impending merger. Firstly, it will joint the top 20 biggest steel producers in the world, with a crude steel production capacity of more than 17m tonnes/year, which will have a positive effect on the prospects of its long discussed IPO. Secondly, the assortment of the Holding production will increase and, thirdly, the capacity utilization will increase.”

Akhmetov’s holding company confirms the negotiations, stating, “Both the parties are considering possible scenarios of co-operation and of combining resources in order to strengthen the position of Ukrainian steelmakers on international markets.”

The obstacle: who owns the mill? On May 26, two men claiming to represent offshore companies registered in Cyprus, Boris Podolsky and Ilya Gorn, announced the sale of Mariupol to an unknown investor. Meanwhile, Volodymyr Boyko, Mariupol’s chief executive officer and manager of its shares, has stated to Ukrainian press that he “took part in no oral or written agreement to transfer their ownership.”

Russian giants like Severstal (owned by Russian billionaire Alexei Mordashov) are said to be in the mix. Will the Russians again foil Akhmetov’s bid to create a Ukrainian steel giant?

Polish billionaire buys Ukrainian gas firm in middle of Naftogaz debate

By admin

On Jun 15 2010

In energy

Polish richest man, billionaire Jan Kulczyk, whose fortune was estimated by Forbes to be $2.1 billion in March, is increasing his energy investments in Ukraine.

His Kulczyk Oil Ventures, through its subsidiary, Loon Ukraine Holding, bought a 70% stake in of one of Ukraine’s largest private producers of natural gas, KUB-Gas, for $45 million; the deal was completed last Friday. Kulczyk Oil Ventures, which went public in May on the Warsaw Stock Exchange (symbol: KOV); used part of the proceeds from the IPO to close deal in Ukraine.

Dariusz Mioduski, the president of Kulczyk Oil Ventures, told the Polish press that, “We plan to increase production in Ukraine and KUB-Gas has enough potential to at least double its current production.” Kulczyk Oil is also exploring opportunities across Central and Eastern Europe as well as in other hydrocarbon basins in the Middle East and Southeast Asia.

Poland’s foray into Ukraine comes in the midst of news from Russia that its Gazprom gas monopoly has offered to merge with Ukraine’s state energy firm, Naftogaz. Ukraine has significant gas resources that need development investment.

Ukraine’s Richest Loses Deal for Coveted Steel Mill

By admin

On Jun 02 2010

In Steel

Rinat Akhmetov, Ukraine’s wealthiest man with an estimated $5.2 billion steel and coal fortune according to Forbes, lost his bid for Ukraine’s fourth largest steelmaker, Zaporizhstal, in a surprise twist according to reports from Ukraine.

This week a group of undisclosed Russian investors took control of Zaporizhstal for a reported UAH 1.7 billion (about $220 million) supposedly financed by Russia’s state-owned Vneshekonombank (VEB Bank). That’s just over a month since the news broke back in April that Akhmetov’s Metinvest steel and mining holding company and Korea’s steel producer POSCO were on track to complete the deal to acquire a controlling interest in the steelmaker for $2 billion (according to Ekonomicheskaya Pravda).

The unexpected loss for Akhmetov and the rumors on price discrepancy are raising concerns about Russia’s influence in Ukraine under the new presidential administration of Victor Yanukovich who has been known to favor Russia. Also curious: Akhmetov is a member of Yanukovich’s Party of Regions.

Back in October, Metinvest and POSCO signed a memorandum of cooperation which called for the two firms to “exchange information and technologies to cooperate in seeking steel and mining business opportunities in Eastern Europe and former Soviet Union countries including Ukraine.” If the deal for Zaporizhstal had closed, Metinvest would have had an expanded product line, Zaporizhstal would have had access to Metinvest’s raw materials and POSCO would have become the second largest steel producer in the world according to investment bank, Millenium Capital.

In a research note, Millenium wrote “withdrawal of Metinvest from the deal undermines the market’s expectations of the dividend payout to have been approved at the next general meetings of Azovstal and Avdiivka Coke Plant. It is an open secret that Metinvest has started earlier to concentrate cash funds for the Zaporizhstal purchase, which funds are no longer needed after Metinvest failed to close the deal.”

Ukrainian Billionaires Bilking Investors on Energy Asset?

By admin

On May 20 2010

In energy

Ukrainian billionaires Henadiy Boholyubov and Ihor Kolomoyskyy are involved in a lawsuit recently brought by Austrian Raiffeisen Zentralbank Osterreich AG against Ukraine’s largest oil company Ukrnafta for nonpayment of dividends. Boholyubov and Kolomoyskyy through their Privat holdings control a 42% stake in the energy company, but according to one analyst “effectively control the oil company through loyal management.”

The Austrian bank, which has significant investments across Eastern Europe, filed a lawsuit with the Commercial Court of the city of Kyiv in April demanding that Ukrnafta pay them a dividend in the amount of UAH 3.164mn.

Claims have also been presented to Ukrnafta by Kazimir Partners Investment Fund represented by Kazimir Ukraine Convergence Fund Limited for the dividends payout for 2005 amounting to UAH 7.6mn.

Analysts at research firm Millenium Capital write, “We see this news as negative. Information that the dividends were not paid to all shareholders confirms, once again, the lack of transparency in the management of the company.”

Back in January it was reported that Ukrnafta’s shareholders decided to pay 5.08 billion hryvnias, or $635.8 million, in dividends for 2006-2008. The government, which owns a majority stake in UkrNafta, was unable to recover its share of dividends due to a shareholder conflict with Privat’s owners who had been said to be resisting the government’s attempts to hold a shareholder meeting amid fears that the management would be reshuffled. Prior to the presidential elections, then Prime Minister and presidential candidate Yulia Tymoshenko had said she would return control over Ukrnafta from Privat back to the government if she won.

Spring and the Business of Green

By admin

On Apr 07 2010

In Analysis

Consecutive 70 degree days in NYC and I finally feel Spring is really here!

April’s theme at Global Markets is the Business of Green. We have some interesting guest writers to come, and I will be looking at what green means in Central and Eastern Europe. A friend of mine in Romania who is planning to put solar panels on his roof led me to an organization dedicated to promoting green building in the region. Central and Eastern Europe has definitely gotten a boost from the European Union’s very strong green movement. For example, Armenia has launched an EU-funded Web portal Renewable Energy Armenia. Ukraine has benefitted from green funding from the European Bank for Reconstruction and Development. Georgia is exploring a carbon credit program. Some countries have longer to go than others – the coal mining towns in Ukraine’s East need much cleaning up after the pitfalls of Soviet industrialization. The scariest information I ever heard was when I took a demography class with Murray Feshbach who has been chronicling the death of the environment in Russia for decades. He is now with the Woodrow Wilson Center.

For more “green” info check out Ecoseed which says it is a comprehensive green news site.

Swan Day: Celebrating Women Artists (Virlana Tkacz) and Women Who Support the Arts (Ann Ziff)

By admin

On Mar 29 2010

In Reflections

This past Saturday was something called Swan Day which is a celebration of women artists. The long term goal of Swan Day is “to inspire communities around the world to find new ways to recognize and support women artists as a basic element of civic planning.” I am doing my part by lauding the efforts of Virlana Tkacz who is our guest writer. She is the founding director of the Yara Arts Group creating theater pieces based on contemporary poetry and traditional myth and legend, much of it focused on women and many pieces about Ukraine. Her work is incandescent and I cannot wait to see “Scythian Stones” at La MaMa in April.

Also on my agenda: going to see the Whitney Biennial which showcases 20 women artists. And if I ever get back to Moscow anytime soon: Garage Center for Contemporary Culture, Russian socialite and billionaire Roman Abramovich’s girlfriend, Dasha Zhukova’s, art space which is meant to rival London’s Tate.

I am also impressed with Ann Ziff who recently announced a $30 million gift to the Metropolitan Opera which turns out to be the largest single gift from an individual in the company’s history. Under the direction of Peter Gelb, the Met has been trying to dust off its staid image, and its new production of Shostakovich’s The Nose is a great example. I didn’t like all the visual projections – I thought they took away from Valery Gergiev’s beautiful orchestra direction, and Paul Szot’s amazing performance – but they were an interesting experiment and I was excited to be a part of it.

We can’t all be Ann Ziff, but we can do our small part by attending arts events and giving our time to promote the arts.

Only 2 Women Billionaires in Eastern Europe, Russia and rest of CIS

By admin

On Mar 15 2010

In Analysis

Where are all the women? We’re Half the Sky as but we’re always underrepresented as Catalyst reasearch points out (see my previous post titled International Women’s Day). The same is true for Eastern Europe, Russia and the rest of the CIS where only 2 women reached Forbes billionaire ranks out of some 40 or so total women on the 1,011 long list.

The richest in the region is Elena Baturina who returned to the list after a rebound in Russia; her net worth: $2.9 billion. The wife of Moscow Mayor Yuri Luzhkov (who has been in power since 1992) runs Inteko which started out in furniture and crockery then moved into construction. Her real estate projects were hard hit by the 2008 financial crisis but she is back building affordable housing for Russia’s rising middle class. She also reportedly has interests in Africa, a continent where several CIS oligarchs are looking to expand. Though rumors swirl about favoritism in winning city contracts because of her family connections, nothing sticks; Baturina is aggressive about maintaining a clean reputation.

The other is Dinara Kulibaeva, the media-shy second daughter of Kazakhstan’s long-serving president Nursultan Nazarbaev and wife of Timur Kulibaev, also a billionaire and rumored to be a potential successor to Nazarbaev. She also returns to the Forbes billionaires list; her fortune is estimated at $1.1 billion resting on her shared stake in Halyk Bank which received hundreds of millions of dollars in bailout funds from the government post 2008/2009 financial crisis.

The common thread between the two is the connection to powerful men. Though the Soviet State introduced equal gender rights and formal equality under law and this should have been grandfathered into newly independent states, the theory has not always played out in practice. Some states in Central Asia (Tajikistan and Uzbekistan) have even taken steps backward since the 1991 dissolution of the Soviet Union with discrimination against women rising.

More Billionaires in Eastern Europe, Russia and rest of CIS says Forbes

By admin

On Mar 10 2010

In Analysis

2009 was a year of recovery for the World’s Billionaires as a whole reports Forbes (for whom I have been freelancing). The wealthiest in Eastern Europe, Russia and the CIS states improved their fortunes as commodities markets recovered and world stock markets rose.

Poland, a success story among transition economies, but which had only 1 billionaire on the list last year, Zygmunt Solorz-Zak, is back with 4 billionaires. In addition to Solorz-Zak, Jan Kulczyk, Leszek Czarnecki and Michal Solowow return to the Forbes billionaires list. Kulczyk, who was last on the Forbes list in 2006, is strengthened by his energy holdings.

Dinu Patriciu, Romania’s richest billionaire, is also making a big push in energy, going after licenses to explore for oil and metals in the Black Sea; in January he even got patent for a method of mining and processing seabed sediment.

Despite the fact Romania’s GDP contracted an estimated 7% in 2009 and its hopes to introduce the euro by 2014 may be thwarted by collapsing euro-economies like Greece, the country saw the return of former tennis ace, Ion Tiriac, to the Forbes billionaires list and added one new billionaire, Ioan Niculae, who has interests in agriculture.

Indeed it was a good year for agriculture – the world’s rising population needs to be fed. Andrej Babis joined the Forbes list as a new billionaire from the Czech Republic; his Agrofert agricultural holding company keeps growing and may be looking at European expansion plans. Along the same theme, two new Russian billionaires, Andrei Guriev, and Anatoly Lomakin, made their fortune in fertilizers; and fellow Russians Pyotr Kondrashev and Vyacheslav Kantor return to the billionaires list based on their interests in the fertilizer business.