Constitutional Court To Examine MMKI Privatization

The Constitutional Court is scheduled to begin examining the legality of Mariupol Illicha’s (MMKI: BUY) privatization later today. The decision to have the court examine MMKI’s privatization stems from a 2004 suit filed by 47 members of parliament claiming the special conditions surround MMKI’s sale were unfair. Following the approval of a law in 2000, the state privatized a 50+1 stake in 2001 for USD 86 mln. Eugene Cherviachenko: It is not clear at the moment whether the examining of MMKI’s privatization will lead to any change in the company’s ownership. We think that apart from a short term stock price volatility the outcome of the court hearing is unlikely to have any other negative consequences for MMKI’s minority shareholders. If the current owner retains control over MMKI, we will see more of the status quo. On the other hand, given that MMKI has long been an attractive takeover target for larger players, we think a change in its ownership would only improve MMKI’s currently low corporate governance standards.