Ukraine rebels seize billionaire Akhmetov's enterprises in Donbas

By bne IntelliNews March 1, 2017

Pro-Russian separatists in Ukraine's eastern Donbas region on March 1 took control of enterprises of the country's largest steel maker Metinvest and energy conglomerate DTEK that are owned by billionaire Rinat Akhmetov.

The move follows a blockade of transport routes to rebel-held territories by pro-Kyiv war veterans in protest at smuggling across the region. Three days ago, the governments of the two self-proclaimed Donetsk and Luhansk republics that comprise the Donbas threatened to expropriate enterprises if Ukrainian activists didn't unblock rail links.

The so-called Donetsk People's Republic (DPR) imposed "external management" on over 40 enterprises, "with some exceptions", its head Alexander Zakharchenko said. "Documents are being seized at some [enterprises]," Interfax news agency quoted Zakharchenko as saying.

External administration over Akhmetov-controlled enterprises is also being introduced by the neighbouring Luhansk People's Republic (LPR) to control payment of their taxes, local officials said.

Metinvest has large exposure to the Donetsk region, specifically, Yenakiyeve Steel, Khartsyzk Pipe, Krasnodon Coal and a dozen of smaller firms. DTEK has four major assets in the rebel-held territories, including three coal mines and one thermal power plant. The company's distribution units are also involved in electricity supplies to the rebel-held territories, the Concorde Capital brokerage in Kyiv wrote in a research note.

The rail blockade has led to acute shortages of Donbas-mined anthracite coking coal, which accounts for one third of all electricity generated in the country.

On February 15, the Ukrainian government imposed temporary emergency measures in the national energy sector. Earlier, Deputy Prime Minister Hennadiy Zubko said the government could impose rolling blackouts in several regions due to the shortages.

On March 1, Ukrainian Justice Minister Pavlo Petrenko that the nationalisation of Ukrainian enterprises in Donbas will be included in Ukraine's international lawsuits against Moscow. "We understand that Moscow rules authorities in the DPR and LPR," he told journalists. "Their statements spell out the stance of official Moscow, as an aggressor country, regarding some or other actions."

Ukrainian President Petro Poroshenko saied on March 1 that the expropriation of enterprises in Ukraine's eastern Donbas region by pro-Russian separatists is a "brutal and dreadful" violation of international law.

"Russia de-facto confiscated Ukrainian state and private assets located in the occupied territory. This is another evidence of Russian occupation of eastern Ukraine," Poroshenko told Boris Johnson and Witold Waszczykowski, according to his media office.

Poroshenko added that the move took place against the background of steps to bring the eastern territories into "the [Russian] ruble zone", as well gas and power supply systems from Russia, and the introduction of direct budget transfers.

The president promised that these actions of the separatists will "definitely be punished" by Kyiv, and Ukraine will demand broader sanctions for those responsible for the seizure of Ukrainian enterprises in the Donetsk and Luhansk regions.

Related Articles

Russian mobile major MTS said to be selling its Ukrainian division to Azeri AzInTelecom

Russian mobile major Mobile TeleSystems (MTS) is considering selling its Ukrainian business Vodafone Ukraina to Azeri state-owned AzInTelecom or Azercell, Лiга.net and RBC business portal reported ... more

Ukraine raises record-high $1.3bn via local bond placements

Ukraine’s finance ministry received record-high receipts of UAH33.3bn ($1.27bn) from placing UAH and US dollar-denominated bonds on July 16. Kyiv raised UAH7.4bn by placing four types of ... more

Ukraine's PrivatBank reports 2.7-fold y/y jump in net profit in January-June

Net profit of Ukraine's largest lender PrivatBank, nationalised in late 2016, jumped by 2.7 times to UAH18.3bn ($310mn) in January-June, the lender said in a statement e-mailed to bne ... more

Dismiss