Mittal may lose Ukranian assets | india | Hindustan Times
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Mittal may lose Ukranian assets

The government mulls review of the sale deed following steel baron's failure to live up to investment commitments.

india Updated: May 18, 2006 19:39 IST

NRI steel magnet Lakshmi Mittal may lose his prime Ukrainian assets as the government mulls review of the sale deed following his company's failure to live up to investment commitments.

Ninety-three per cent stake in Kryvorizhstal was sold to Mittal Steel's German subsidiary in October last for 24.2 billion hryvnas ($4.8 billion), but the country's property fund has indicated that the plant may be re-sold at an auction because the current owners are not honouring their commitments.

Ukraine's authorities have said that Kryvorizhstal, the country's largest steel mill, could be re-sold to a group of investors for $6 billion.

"There are several domestic and foreign investors who are ready to pay 30 billion hryvnas (about $6 billion)," Valentina Semenyuk, the head of the Ukraine's State Property Fund was quoted as saying by RIA Novosti.

Semenyuk declined to name the new investors, citing considerations of commercial secrecy, only saying it would not be another reprivatisation attempt, but the government's move to exercise control over investment obligations.

The October reprivatisation sale of Ukraine's Soviet-era steel "gem" to Mittal Steel was seen as a test case for the country's new pro-US "orange" regime, following allegations of corruption over previous privatisations in the country.

At that time, President Viktor Yushchenko had declared that he was satisfied with the auction to Mittal Steel Kryvorizhstal, which belonged to the Investment Metallurgy Alliance, controlled by the son-in-law of former Ukrainian President Leonid Kuchma.