Timoshenko Sets Her Own Prices

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Timoshenko has announced the stake of 50 percent plus a stock in Nikopolsky Ferroalloy Works (Russian acronym is NZF) costs $500 million, apparently not discouraged by the fact that Viktor Vekselberg and Alexander Abramov offered only $380 million for the 73 percent in the enterprise to the stocks holder Viktor Pinchuk.

Ukrainian Prime Minister Yulia Timoshenko

Even in June, Vekselberg and Abramov apparently counted on buying out the 73 percent in NZF from Viktor Pinchuk for $380 million before this fall. Yulia Timoshenko stepped in, having cautioned Vekselberg against unwarranted expectations.

Now the NZF stocks are under the court encumbrance with no ultimate decision on their transfer to the state-ownership made to-date. Meanwhile, Timoshenko has appraised the majority stake in the enterprise, intending to sell its 50 percent plus a stock for as much as $500 million before close of this year, but never bothering to shed light on the methods applied in evaluation.

Therefore, it seems NZF re-privatization will replay the sale of Krivorozhstal. Investors will be offered the terms that would be deliberately unacceptable to them but that would enable PM either to retain the works in the state ownership, or prompt investors to reach off-the-record agreement with Timoshenko.

“No man of sense will ever buy NZF for such money, which top dollar is $120 million,” a co-owner of one of the ferroalloy works in Russia specified to Kommersant. Besides, NZF is not the owner of its raw material base – Ordzhonikidze and Margantsevsky mining and processing integrated works are controlled by Kolomoisky’s Privat Group and Igor Kolomoisky is the actual holder of 25 percent in NZF.

At the same time, Evrazholding owner Alexander Abramov appears to be the only bidder interested in the asset, according to data available to Kommersant. Abramov has transferred $25 million to Viktor Pinchuk for NZF via a chain of offshore companies and is not willing to give up.

Sources close to Abramov say Kolomoisky has made him an informal offer concerning the buy-out of majority stake via a re-privatization auction, should Privat Group become a successful bidder. Nevertheless, a source with Evrazholding told Kommersant yesterday Abramov may directly bid at the auction.

Viktor Vekselberg couldn’t have been reached to comment Monday.

Source: Kommersant

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