Do I Hear USD 2 Bln?

Ukrainian weekly Invest Gazeta last week printed a list of companies most likely to bid for a controlling stake in Kryvorizhstal (KRST: BUY).

Arcelor (Luxemburg-France)

Mittal Steel (United Kingdom-India)

Evrazholding (Russia)

Severstal (Russia)

The Industrial Union of Donbass (Ukraine)

Posco (South Korea)

Concorde Capital: Although Russian businesses and oligarchs are seeing many of the business deals and arrangements they made under the previous regime go sour, we do not think Russian capital will be scared off from the bidding. Mittal Steel and Arcelor bid in the previous tender and may be pleased to have a second shot. Posco did not participate in the last auction, but with a profit of USD 3.8 bln last year, it is certainly in a position to bid. IUD is in an increasingly favorable position, as it gets along well with the new regime, but it would need a partner to come up with the capital for the starting price of USD 2 bln. IUD would suffer a deficit of resources if it were to bid. IUD?s EBITDA was only USD 347.6 mln in 2004, and it has no cash reserves on its book. Besides, the company is busy modernizing its steel mills and will invest about USD 3 bln in its Ukrainian plants, ALchevsk Steel (ALMK: BUY) and DMK Dzerzhynskogo.