Inhulets Appeals To Supreme Court

The Inhulets ore mining and enrichment plant (GOK) will submit an appeal to the Supreme Court requesting it overturn a court ruling that its additional share issue illegal. Previously, the High Economic Court declared that an additional share issue by Inhulets was illegal. The additional share issue reduced Ukrrudprom?s stake in the plant from 50 percent plus one share to 37.57 percent in 2003. Concorde Capital: We believe Inhulets GOK is the highest risk among all the GOK?s formerly belonging to Ukrrudprom for re-privatization. The government wants to investigate what was perceived as the un-fair privatization of the Ukrrudprom holdings in 2004. The 37.57% was privatized by Smart Group in July 2004 for x1.1 EBITDA and x0.14 P/S (USD 30.5 mn). The government would have liked to have earned more money off the sale, particularly given the company?s 27% sales growth in 2004. The share issue has been an irritant for the government, as not only was Inhulets bought on the cheap, ? the share to buy was ?prepared? beforehand through dilutive action ? making it even cheaper.