The antimonopoly committee established an anti-record, having made a new decision last week. For five years, the Antimonopoly Committee of Ukraine (AMCU) has been studying the possibility of giving permission for the purchase of one of the oldest and most significant enterprises of the mining and metallurgical complex of Ukraine – Dnipro Coke Chemical Plant (DCCP), Metinvest Group. Market participants were surprised not only by the long period of consideration of a rather uncomplicated case but also by the decision itself, which contains serious limitations for the full activity of the enterprise. At the same time, taking into account the condition of the DCCP, which has not experienced any serious modernization at least since 2007, and the situation with the supply of raw materials, investors are not that interested. Experts are inclined to believe that the AMCU acted biased against a particular company claiming an asset. There is a fear that such a practice of a state body, whose decisions it is almost impossible to challenge, might be extended to other enterprises in other industries.
Five years after receiving the application, the Antimonopoly Committee granted permission to the international vertically integrated mining and metallurgical group of companies Metinvest to purchase more than 50% of the shares of Dnipro Coke Chemical Plant (former EVRAZ Dneprodzerzhinsky Coke and Chemical Plant).
Metinvest applied for permission to acquire the company in 2014. This happened after the release of its former owner (Russian group Evraz) from its assets in the MMC. After five years, required by the AMCU for consideration of the case, it was also postponed from 11 to 19 April.
The consideration of the AMCU issue, which lasted for five years, created a situation of suspense and uncertainty for the DCCP. The company would probably need investments, although it is unclear how much. When the company belonged to the Russian group Evraz (2007 - 2014), any significant investments in its modernization have been conducted. Probably, Metinvest will need financial investments, and this is against the background of restrictions imposed by the Antimonopoly Committee of Ukraine that would affect the sales policy and planning of the plant. Coke-chemical production is B2B and can function effectively only if integrated into a vertically integrated production chain. This is one of the reasons why, in 2014, when Evraz went out of business in the Ukrainian mining and metals industry, it began to look for a buyer for an asset and did not keep it for itself, market participants say.
The restrictions, imposed on the enterprise, will preserve an uncertain situation during the whole period of their validity. Thus, the DCCP would hang up for 12 years: the committee’s consideration has lasted for five years, and restrictions have lasted for seven years, during which the issues of investment, changes in operating activities will pass through the prism of restrictions. Thus, AMCU did everything to cast doubt on the business efficiency of the enterprise. Metinvest has a rather large and serious experience in acquiring troubled enterprises and returning them to life. In Ukraine, the Antimonopoly Committee is not limited in terms of antitrust law, experts say. There are no government agencies that could be an alternative to the AMCU, or that could appeal against the decisions of the committee. The only way to challenge them is to go to court. At the same time, according to my observations, entrepreneurs. The current AMCU works legally.
Metinvest itself is very restrained to comment on the situation. So far, the group has only assured that the decision to buy an asset, which is extremely important for the mining and metallurgical sector and the economy of Ukraine, will be positive if “we agree on a price with the seller.”