Russia’s VEB Bank buys IUD’s USD 1 bln in debt

Ukrainian daily Delo reported today that Russia’s Vnesheconombank (VEB) bought the Industrial Union of Donbas’ about USD 1 bln in debt. The exact figure was not officially disclosed by either party. IUD sold a 50%+2 stake to a group of Russian investors in mid-January, in a VEB financed transaction. Reports then indicated that Russian Prime Minister Vladimir Putin, chairman of Vnesheconombank’s supervisory board was personally involved in the deal. IUD is a metals & mining holding company that includes Alchevsk Iron & Steel (UX: ALMK UK), Alchevsk Coke (UX: ALKZ UK) and DMK Dzerzhinskogo Steel (UX: DMKD UK). Andriy Gerus: We view the news as positive for IUD-related companies. We expect the group’s new shareholders to help restructure IUD’s debts and improve its business. We think Alchevsk Iron & Steel and DMK Dzerzhinskogo have the potential to gain up to 10% in the next month following news of the deal.