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.”


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