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Business in a new way, or How aggressor loses assets in Ukraine 06/14/2017 23:33:00. Total views 281. Views today — 0.

The main owner of the Russian mining and metallurgical group Evraz Roman Abramovich and his partners formally took another step to exit the business in Ukraine.

DHC group of Kharkiv oligarch Oleksandr Yaroslavsky bought their mining and processing plant Suha Balka situated in the Dnipropetrovsk oblast.

The corresponding message appeared in the media at the end of May. However, do not hastily triumph over the fact that "Abramovich is over in Ukraine".

There are too many questions in this deal. The main one is who is the real beneficiary of this transaction?

Non-random coincidences

Dnipropetrovsk oligarchs Ihor Kolomoysky and Hennadiy Bogolyubov brought R.Abramovich to Ukraine some time ago.

In 2007, they sold such metallurgical assets to the Russians: Suha Balka, Dnipropetrovsk Metallurgical Plant named after Petrovsky, Dnipropetrovsk, Dniprodzerzhinsk and Baglya coke plants.

Many wondered when R. Abramovich will leave Ukraine back in 2008-2009, during the first wave of the crisis in world metallurgy.

The question is quite logical, because to reduce operating costs and debt burden during the crisis, Evraz had to sell part of the assets in South Africa, Europe and North America.

But Abramovich kept the Ukrainian branch. Although, frankly speaking, this is definitely not the most attractive business unit. Dnipropetrovsk Metallurgical Plant is one of the oldest metallurgical plants in Ukraine.

This means a high degree of equipment wear, low productivity and high costs for repairs and upgrades. As for the Suha Balka plant, it extracts iron ore in mines.

Therefore, this ore is much more expensive than that of the nearby mining and processing plants Yuzhyj, Ingulets, Centralny and Severny, where mining is conducted in quarries, i.e. using open method.

But, perhaps, that is why Evraz did not hurry with the sale of Ukrainian assets. Still, it will not be possible to gain more or less decent money from their sale.

The fact is that in 2007 R.Abramovich and the partners paid a fantastic sum for these plants to the Privat group: $ 3.8 billion.

$ 1 billion was in "live" money, for the remaining amount Kolomoisky and Bogolyubov received 9.72% of shares in Evraz-Holding.

Nevertheless, it is obvious that now to get $ 1 billion for all enterprises of the Dnipropetrovsk Metallurgical Plant group is unrealistic, even $ 500 million seems to be an unrealistic figure.

Severe market reality is close to $ 400 million. So, the difference between this figure and $ 1 billion should be considered as a direct loss of the Evraz owners.

Clearly, they do not want to do it. Therefore, until recently, the Ukrainian branch continued to be a full-fledged business unit of Evraz Holding.

Even despite the sharp deterioration in Ukrainian-Russian relations since the spring of 2014. In July 2016, Evraz Vice President Denis Novozhenov in an interview claimed that his company did not intend to sell assets in Ukraine.

"Ukraine, by virtue of its location, availability of raw materials, accumulated industrial expertise, is one of the best countries where it is possible and necessary to be engaged in metallurgy. That is why Ukrainian enterprises are united in a separate division "Ukraine" and are strategic assets for us, there are no plans for their sale", - said the top manager.

However, something has changed since then. The sale of Suha Balka was preceded by a series of related events.

At first, the enterprise did not receive a new license from the State Service for Geology and Subsoil Use of Ukraine for the right to develop iron ore deposits.

The validity of the previous license, issued in 1996, ended in September 2016. On this basis, the prosecutor's office stopped the extraction of ore, which formally suddenly became illegal.

Thus, because of the actions of the authorities, the enterprise had been in a state of forced downtime for several months and suffered serious losses.

Evraz announced the lack of a license back in March 2017, although all the necessary documents for obtaining a license were provided to the Ukrainian Service for Geology and Subsoil Use.

Such actions of officials can be seen as pressure on the owners to force them to part with the enterprise.

The protest rally of the Suha Balka miners looks quite suspicious. On May 11, they refused to rise to the surface, demanding an increase in wages.

It is possible that the payment was indeed inadequate. But... the rally began on May 11, it ended on May 17 - after the administration of the plant agreed to raise the salaries of employees by 20%.

And already on May 27, i.e. in a week and a half, it becomes known that A. Yaroslavsky became the new owner of the the Suha Balka plant. It is unlikely that such a coincidence is accidental.

Rather, the miners' protest was the last straw that forced R.Abramovich and his partners to finally take that decision.

Screen for...

According to the degree of influence on the media, decisions of the government and parliament, Yaroslavsky has always been and remains the second-tier oligarch. Yes, in Kharkiv he is a very influential and "respected" person. But he does not even have the enormous resources of the groups of I.Kolomoisky, R.Akhmetov, D.Firtash.

Therefore, the probability that Yaroslavsky could do such a scheme, seems close to zero.

Earlier, when Yanukovych was a president, the VETEK group of Serhiy Kurchenko, using the support of the authorities, easily seized Yaroslavsky’s favorite toy - the Kharkiv Metalist football club and the stadium.

Since that time, Yaroslavsky did not become stronger and closer to the authorities, because he is trying to avoid playing politics.

And in the ranking of the wealthiest Ukrainian businessmen he also decently lags behind the leaders, ranking 8th.

In addition, because of the current policy of "de-oligarchization", conducted by President Petro Poroshenko, most FIGs, including the aforementioned, are actually deprived of the right to vote.

The rest, pro-government ones, can act only upon agreement with either the trustees of the President, or with him personally.

If someone tries to start an independent game, an acute conflict immediately arises.

As it was, for example, with the blocking by Prime Minister Volodymyr Groysman the entry into force of the decree of the Cabinet of Ministers, allowing to start selling radio frequencies for 4G communication.

In the case with Suha Balka everything was done quietly and without scandals. But somebody still gave the command to the leadership of the State Service for Geology and Subsoil Use, as no official will ever act without instructions from above.

This means that the command came from the very top. But why would the President play in the interests of Yaroslavsky? Indeed, there are no arguments in favor of this option.

After all, Poroshenko acts primarily in the interests of his own business, FIG Ukrprominvest.

As an example, we can recall the sale of the Ukrainian branch of Russian Sberbank, when, according to media reports, the investment company ICU, representing the interests of Ukrprominvest, participated in the negotiations.

ICU had allegedly proposed at that time to make Lipetsk confectionery factory, that is part of Roshen company of P.Poroshenko, leg of a deal – so that the buyer of Sberbank would simultaneously buy this factory as well.

ICU had, of course, belied the information of media that referred to the sources close to the negotiations.

Nevertheless, the fact remains: Roshen's brand shops found a lodgment in the premises of some branches of Sberbank in Kyiv, which had closed after the acts of violence of the so-called "activists".

As for O.Yaroslavsky, he had to "help" the larger business sharks earlier.

For example, in 2016, a company from DCH, the Cyprus Glenshee Holdings Ltd. offshore company made an application to participate in the privatization of the state Odessa Port Plant, a major producer of mineral fertilizers.

And DCH reported at that time that it intends to involve Rothschild&Co investment bank as an adviser to purchase OPP.

And this is the same Rothschild&Co, under the management of which P.Poroshenko placed his Roshen… Coincidence? Maybe.

It should be emphasized once again that the Geology and Mineral Resources public service is not the structure that will now jig to the tune of O.Yaroslavsky, as well as of any other of his colleagues.

Meanwhile, let us recall another curious deal that took place in August 2016.

KhTP challenge pennant

GAZ Russian group of Oleg Deripaska had sold the Kharkiv Tractor Plant to O.Yaroslavsky at that time.

KhTP is the largest enterprise of Ukrainian agricultural machine building, earlier belonged to the Kharkiv oligarch. It was he himself who sold the KhTP to the Russians in 2007. But there is no sensation in this.

In fact, cases when businessman A bought some asset from businessman B, and then sold it back to A (much cheaper as a rule) – are not so rare.

It is another matter that the sale of KhTP is very similar to the situation with Suha Balka.

As the chairman of the board of directors of GAZ Siegfried Wolf stated at that time, in August 2016, "the decision to sell the KhTP was made against the backdrop of an unsettled situation at the plant, which looks like an attempt of illegal seizure".

The fact is that the enterprise was stopped in March 2016 by the joint actions of security officials, the prosecutor's office and the SBU.

The accusations against the director general Andriy Koval were standard for the recent times: he was suspected of "working for Putin".

According to the investigators, the director general was going to dismantle the cast houses of the enterprise, cut the equipment and take it to Russia.

The version looks rather exotic: Russia has its own developed agricultural machine building at the same technological base as Ukraine.

So, it is highly unlikely that the equipment of KhTP is of at least some value for Russians.

Nevertheless, the plant was stopped – consequently, it incrementally began to accumulate wage arrears, the prosecutor's office took on the case, demanding the repayment of these debts…

This is how simple and easy a working enterprise was driven to the grave, forcing its owners to go for sale with the help of law-enforcement agencies controlled by the president.

"This can lead to serious sanctions against those who are behind the raider attack and use the name of Ukraine as a cover", - S.Wolf stated at that time.

It is curious that P.Poroshenko took the most meaningful participation in the situation with KhTP: a meeting devoted to this issue was held in the presidential administration in December 2016.

Representatives of the enterprise had delivered the message of labour collective to P.Poroshenko at that time with a request to assist the production startup.

"Having studied this document, as well as the course of events, the president of Ukraine gave the orders necessary to remove legal obstacles for the production startup", - the statement of the PA said.

As far back as March of the current year, P.Poroshenko went to KhTP first of all during the trip to Kharkiv, promising to help the enterprise in searching new market outlets.

At the same time, it should be noted that the president has not been particularly indulging in industrial enterprises during working trips around the country up to the present moment. And he certainly did not promise anyone personal support, limiting himself to the generality about the need to overcome the economic crisis in Ukraine…

It is not personal, it is just business

Thus, you can see some parallels in cases with KhTP and Suha Balka: Russian owners, having faced with pressure from the Ukrainian state apparatus, are forced to sell assets.

The buyer in both cases is a group behind whose back the interests associated with the incumbent head of state are guessed.

Of course, you can ask: what kind of crime is that the representatives of the aggressor are driven out of Ukraine? There is really no crime in this.

The question should be put differently – how much correct should this driving out be, when the final beneficiary of the interstate Ukrainian-Russian conflict is one private financial industrial group?

Let us recall that people die on what seems like a daily basis during this conflict in the Donbass, and the total loss counting is thousands of people – not including millions of people who had lost their home, work, and secure future.

It is one thing, when the Russian assets are officially nationalized in Ukraine, i.e. become the governmental property, by a court decision to compensate for the actual damage.

It is quite another matter, when they are just forced to be sold to some financial industrial groups which have the opportunity to act with the help of institutions at greatly reduced prices.

In other words, this can be claimed to be jobbery – corruption. Not a single country dispenses with it, but some more, other – less.

There is a certain line in civilized countries, which is not accepted to be crossed. Obviously, we still have a long way to these standards of big-league politics…

Furthermore, it is possible to recall the history of struggle for the Kremenchuk oil refinery in that context.

Ukrtatneft private company was created on its basis in 1994 – a joint venture (JV) with the participation of a number of Ukrainian and Russian private and state-owned companies.

The Russians behaved badly at that moment, not having fulfilled their obligations under the agreement on the JV establishment. But they were also treated accordingly.

Privat FIG of I. Kolomoiskyi had driven Russians out from among the shareholders in the 2000s on the classic raider scheme: using an unconcerted additional share issue which "blured" the share of opponents, with taking the office by force, "necessary" decisions of courts and registrars.

And it also seems that there is no reason to sympathize with Russian companies of the President of Tatarstan Mintimer Shaimiev. The lawlessness was returned to them, in accordance with, so to say, "the law of the boomerang".

The only problem is that jurisprudence does not know such a law.

Therefore, when the Tatarian companies and the State Property Fund of Tatarstan appealed to the international commercial arbitration tribunal in Paris, it satisfied their demands in August 2014, obliging the state of Ukraine to pay $112 million compensation for violating the rights of investors.

So, the illegal seizure of the Kremenchuk refinery was carried out by Privat FIG of I. Kolomoiskyi, but all citizens of Ukraine had to pay compensation to Russians out of pocket.

There is every reason to suppose that the same scenario will be subsequently realized concerning the KhTP and Suha Balka.

There is all the more reason for this as S. Wolf had already threatened the authorities of Ukraine with an international trial for the loss of KhTP.

Yuriy Nekhayev, specially for OstroV