Metinvest B.V. (the Netherlands), the parent company of the international vertically integrated mining and metallurgical group Metinvest, has established control over PrJSC Mine Construction Management Department No. 1 (Lysivka village, Pokrovsky district, Donetsk region) and PrJSC Automobile Enterprise Ukrbud (Pokrovsk, Donetsk region), included in Pokrovske Colliery.
According to the statement of the department in the information disclosure system of the National Securities and Stock Market Commission of Ukraine with reference to the information received on March 19 from Metinvest B.V., on March 18, 2021, the company received the ownership of the controlling stake in this enterprise.
“In pursuance of the requirements of Part 2 of Article 65 of the law on Joint Stock Companies, Metinvest B.V. said that on March 18, 2021, it acquired ownership of the controlling stake in the company as a result of the acquisition of shares in the charter capital of Sviato-Pokrovska Mine No. 3 LLC and became indirectly the owner of 20,466 ordinary registered shares of PrJSC Mine Construction Management Department No. 1, and taking into account the number of shares owned by it and its affiliates, became (directly and indirectly) the owner of 54.23% (from 4.29%) of the charter capital of PrJSC Mine Construction Management Department No. 1,” the enterprise said.
At the same time, it is specified that Metinvest B.V. has not acquired shares of PrJSC Mine Construction Management Department No. 1 within the last 12 months.
In turn, in the information of PrJSC Automobile Enterprise Ukrbud in the information disclosure system of the National Securities and Stock Market Commission of Ukraine with reference to the information received from Metinvest B.V. on March 19, it is reported that on March 18, 2021, the company received the ownership of a controlling stake in this enterprise.
“On March 18, 2021, Metinvest B.V., as a result of the acquisition of shares in the charter capital of Sviato-Pokrovska Mine No. 3 LLC, indirectly became the owner of 2573558 common registered shares of PrJSC Automobile Enterprise Ukrbud, which is 50,000971% of the charter capital of Ukrbud,” the company said.
It also clarifies that Metinvest B.V. has not acquired shares of PrJSC Automobile Enterprise Ukrbud within 2020.
Metinvest B.V. (the Netherlands), the parent company of a vertically integrated group of steel and mining companies, has acquired an additional stake in the largest coking coal business in Ukraine, Pokrovske coal business, increasing its effective interest to a controlling stake.
According to a company press release issued on Friday, as a result of consolidating the acquired businesses into the group, Metinvest expects to become fully self-sufficient in coking coal for its hot metal production.
The acquired business comprises several entities (jointly referred to as the Pokrovske coal business), the most significant of which are Pokrovske Colliery and Svyato-Varvarinskaya Enrichment Factory. Together, they mine raw coal, enrich it and sell coking coal concentrate. The assets are located on the border of Dnipropetrovsk and Donetsk regions of Ukraine, close to the group’s coke producers. None of the acquired assets are located in the non-controlled territories of Ukraine.
Pokrovske Colliery produces mostly high-quality K-grade coking coal, which is used in metallurgical coke production. As at 1 January 2019, its JORC Mineral Resources and Reserves amounted to 248 million tonnes and 151 million tonnes, respectively, enough to maintain operations for at least 30 years.
Svyato-Varvarinskaya Enrichment Factory is one of the largest beneficiation plants in Ukraine. Its design processing capacity is also around 8 million tonnes of raw coking coal per year.
In 2020, the Pokrovske coal business mined 6.2 million tonnes of raw coal, up 55% from 2018, and produced 3.2 million tonnes of coking coal concentrate, up 39% from 2018.
According to the press release, the acquisition of control in the Pokrovske coal business follows Metinvest acquiring 24.77% of the effective interest in the Pokrovske coal business in July 2018, as well as an option to purchase the remaining 75.22% from the other co-investors upon condition of obtaining all required governmental and other approvals. In October 2020, the group received a one-year approval from the Antimonopoly Committee of Ukraine to obtain control over certain entities being part of the Pokrovske coal business.
Total consideration for an additional stake acquired by the group in the Pokrovske coal business was driven by the value of the option Metinvest obtained in 2018.
In 2019-2020, amid a potential business combination with Metinvest, the Pokrovske coal business restructured a significant part of its loans and borrowings. As at December 31, 2020, the Pokrovske coal business had external debt of $535 million. This mainly consists of a $480 million restructured debt facility maturing in 2030. It is Metinvest’s intention to prudently manage the debt portfolio of the Pokrovske coal business.
Commenting on the news Chief Executive Officer of Metinvest Yuriy Ryzhenkov said that this acquisition is very important for Metinvest.
“The group has experienced a lack of adequate coking coal supplies in recent years. We are now fully self-sufficient in coking coal, which strengthens our vertical integration. From here, the next objective is to integrate the assets into the group to maximise synergies. I am confident that the Pokrovske coal business will improve its efficiency as part of Metinvest and believe that its employees will benefit from our corporate culture and strong social guarantees,” the top manager said.
PrJSC Zaporizhkoks, one of the largest Ukrainian coke and chemical producers, part of Metinvest Group in January-February this year reduced production by 1.1% compared to the same period last year, to 140,100 tonnes.
According to the company, 66,100 tonnes of blast furnace coke were produced in February, while a month earlier – 74,000 tonnes.
As reported, Zaporizhkoks in 2020 increased production by 3.1% compared to the previous year, to 853,120 tonnes.
Zaporizhkoks produces about 10% of coke produced in Ukraine, owns a full technological cycle of processing coke-chemical products. In addition, it produces coke oven gas and pitch coke.
Metinvest is a vertically integrated group of mining companies. Its main shareholders are SCM Group (71.24%) and Smart-Holding (23.76%), jointly managing the company.
Metinvest Holding LLC is the managing company of Metinvest Group.
The Metinvest Group, taking into account associated companies and joint ventures, transferred UAH 22.1 billion in taxes and fees to budgets of all levels in 2020, which is 5% higher than the level of the year before last.
According to a Friday press release of the company, the largest payment of the group’s total payments was income tax. Last year, Metinvest enterprises paid more than UAH 5.2 billion of this tax to the treasury, which is one third less than in 2019.
This is followed by a single social security contribution, the payment of which increased by 18% compared to 2019, to UAH 5.2 billion.
Metinvest enterprises last year transferred UAH 4.7 billion of personal income tax to the budgets, which is 17% more than in 2019.
In addition, the sources of receipts of the state and local budgets in 2020 were the payment for the use of subsoil in the amount of UAH 2.2 billion, the environmental tax of UAH 789 million and the land fee of UAH 713 million.
Central Mining and Processing Plant (Kryvy Rih, Dnipropetrovsk region), part of Metinvest Group, in 2020 reduced the production of merchant pellets by 5.4%, compared to the previous year to 2.27 million tonnes.
According to the audited consolidated financial results released by Metinvest on Tuesday, last year the output of iron ore concentrate at the plant increased by 10%, to 4.904 million tonnes.
Central Mining and Processing Plant is one of the five largest producers of mining raw materials in Ukraine. It specializes in extraction and production of iron ore raw materials – concentrate and pellets.
The plant is part of Metinvest Group, the main shareholders of which are PrJSC System Capital Management (SCM, Donetsk, 71.24%) and the Smart-Holding (23.76%).
Metinvest Group’s management company is Metinvest Holding LLC.