Metinvest announces squeeze out price for Avdiyivka Coke

Avdiyivka Coke (AVDK UK), a Ukrainian subsidiary of
Metinvest (METINV), Ukraine’s largest steelmaker, announced on May 8 that
Barlenco Ltd – a Cyprus company affiliated with the company’s majority owners –
intends to squeeze out Avdiyivka Coke’s minority shareholders at a price of UAH
15 (USD 0.57) per share.

Barlenco intends to acquire the 5% total minority
stake, according to Avdiyivka Coke’s filing.

Dmytro Khoroshun: Metinvest
will spend about USD 5.6 mln on the minority shareholder stakes, which will
value the entire company’s equity at USD 111 mln. Considering that Avdiyivka
Coke’s 2017 net income amounted to USD 107 mln, such a valuation looks several
times less than the company’s fair value.

The squeeze out will be positive for Metinvest
because it improves corporate governance by eliminating the bureaucratic burden
and legal risks attached to the current quasi-public status of Avdiyivka Coke.