Industrial Union of Donbas CEO Mkrtchan arrested in Moscow
8 February 2018
The CEO of Ukrainian steel holding Industrial Union of
Donbas (IUD), Oleh Mkrtchan, was arrested in Moscow on Feb. 7, according to
Interfax-Ukraine, citing IUD’s Chief Legal Officer Serhiy Tkachenko. Tkachenko
was not able to comment beyond confirming arrest, saying that more information
might be available during the next few days.
Mkrtchan, together with Ukrainian MP Serhiy Taruta,
own 49.99% of IUD, according to Interfax-Ukraine. The remaining 50%+2 shares
was purchased in early 2010 by a group of Russian investors. In 2011,
representatives of Vneshekonombank (VEB), a Russian government-owned
development bank, were elected to the supervisory boards of IUD and several of
the holding’s plants.
Recall, in August 2017 Ukraine’s largest steelmaker
Metinvest (METINV) started to sell billets produced by
Dniprovskyy Steel, the main IUD asset in the Ukraine-controlled territories.
The agreement on billet resales might enable Metinvest to collect as much as USD 660 mln that IUD owes for supplies
of Metinvest’s raw materials (mostly iron ore products) during 2011-2015.
Dmytro Khoroshun: It is too
early to draw conclusions on how this development might impact Metinvest’s
cooperation with Dniprovskyy Steel. However, we note that this cooperation is
lucrative for Metinvest, one reason being that supplying iron ore products (of
which Dniprovskyy Steel’s consumption is up to 7 mmt per year) within Ukraine
is more profitable than exporting to Europe or China (by USD 10-30/t).
We will continue monitoring the situation and we
are keeping our neutral view on METINV Eurobonds.
