Ukraine's Richest Man Is Having A

Lucrative War
JOHN HELMER, DANCES WITH BEARS

JUL. 24, 2014, 8:54 AM

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John Helmer
John Helmer John Helmer is the longest continuously serving foreign
correspondent in Russia, and the only western journalist to direct his
own bureau independent of single national or commercial ties. Helmer
is one of the most widely read Russian specialists in the business
world for his news-breaking stories on Russian diamonds, mining,
shipping, insurance, food trade, and business policy.
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Rinat Akhmetov is still the Ukraines richest man. If you believe the financial reports just
issued by his Metinvest group, Ukraines largest steel, ironore, coal and coke maker, its
a case of his singing all the !ay to the bank in "!it#erland $ !ithout the irony of the
musical, %&' (hat A )ovely (ar'*
A ne! ratings report issued by Moodys claims that Metinvest is
benefitting from %the companys ability to generate positive cash flo!s
even in times of a severe do!nturn as observed in +,,- and more
recently. /+0 lo! leverage. /10 high degree of vertical integration. /20
large iron ore reserves. and /30 the geographically advantageous
location of some of its major assets.* 45actly !hat advantage the
geography of eastern Ukraine is conferring on Akhmetovs business
Moodys analysts dont say.
6he !orst Moodys can think of in the short term for Akhmetov is that
%do!n!ard pressure could be e5erted on Metinvests rating as a result
of a further potential do!ngrade of the sovereign rating and7or further
lo!ering of the foreigncurrency bond country ceiling.*
6he Moodys report !as issued on April 8,. 6he good ne!s has
continued to stream in from the, er, eastern front. In the 9une :uarter,
Metinvest announced on 9uly 8;, crude steel output !as up ;< on the
March :uarter, and ironore concentrate gre! by 2< over the same
interval. 6he firsthalf results !erent as good, by comparison !ith a
year ago = steel production do!n ;<, ironore concentrate do!n 1<,
ra! coking coal do!n +8<. 6he only cloud in the sky, according to the
company report, !as sno! $ %adverse !eather conditions, !hich led
to railcar bottlenecks due to sno! on the tracks. In AprilMay, the
enterprises stabilised production, compensating for the drop in the
previous :uarter.*
6he !ord %!ar* doesnt appear in the companys paper!ork. Instead,
the decrease of steel production at the >enakiieve mill = located 2,
kilometres northeast of ?onetsk, in separatist or contested territory =
has been e5plained by %a major overhaul of blast furnace no. 1. In turn,
this and a major overhaul of basic o5ygen furnace no. 8 in May9une
+,82 caused steel output to fall by 3@ thousand tonnes.* (hat !as lost
at >enakiive, Akhmetovs accountants claim, !as made up for by
production gro!th at the A#ovstal and Ilyich "teel mills, both located
at the port city of Mariupol, 82, kilometres due south of ?onetsk.
In the second, Akhmetov mobili#ed his men to protect the mill from
formations of Ukrainian separatists. %6housands of steel!orkers,*
Metinvest claimed on May 8@, %fanned out on 6hursday through the
city of Mariupol, establishing control over the streets and banishing
the proAremlin militants !ho until recently had seemed to be
consolidating their grip on po!er, dealing a setback to Russia and
possibly reversing the momentum in eastern Ukraine.* )ocal press
reports put the number in the hundreds.
According to a separate report on the financial performance pof
Akhmetovs steelmills, issued for the first :uarter in May, sales
revenues slipped in the period to B+.- billion. that !as do!n ;<
compared to the March :uarter of +,81. Co!ever, earnings /4bitda0
jumped -8< to B;D; million.
Eot only doesnt the Ukrainian !ar feature in this performance. but
the Russian market is also invisible. 6he sales revenue number
declined, the company says, because Metinvests domestic market,
accounting for more than a :uarter of sales, contracted. %Revenues in
Ukraine totalled U"BD1@ million in 8F +,82, do!n 88< yoy. ?espite
steady sales of iron ore products on the domestic market, sales of steel
products declined amid lo!er demand in the major steel consuming
sectors /construction, machinebuilding and pipeline infrastructure0.*
&n the other hand, e5port sales compensated slightly, rising 8< year
on year. (ar proved to be good for business, at least in Ira:, "yria,
4gypt, and )ibya. %6he proportion of sales to the Middle 4ast and
Eorth Africa /M4EA0 rose by @ pp yoy to +,<, driven by greater
volumes of semifinished and flat products. 6he share of sales to the
Gommon!ealth of Independent "tates /GI", e5cluding Ukraine0 !as
do!n 2 pp to D< due to lo!er volumes of finished steel products,
mainly to Russia.* 6he Russian market comprised 88< of Akhmetovs
e5port sales in +,81. it !as do!n to D< by March of this year. 45port
sales to 4urope !ere four times more valuable, and they have been
gro!ing by 8<.
&n the earnings front, Akhmetov did particularly !ell out of the
overthro! of Hresident Iictor >anukovichs government in Jebruary,
and the dramatic cut in the costs of his production !hich has follo!ed,
as the e5change value of the hryvnia collapsed. %6he rise in
consolidated 4KI6?A !as primarily attributable to hryvnia
devaluation, !hich added U"B1,8 million yoy to the total. &ther key
drivers of 4KI6?A gro!th !ereL falling market prices for coking coal,
scrap metals and ferroalloys, !hich reduced costs by U"B3+ million
overall. lo!er gas consumption due to the launch of HGI at Ilyich "teel,
a fall in gas price yoy and the optimisation of temperatures in
metallurgical processes, !hich brought savings of U"B32 million
overall. MandN lo!er distribution costs of U"B8+ million due to
decreases in rail!ay tariffs follo!ing the hryvnia devaluation.*
Metinvest is registered in 6he Eetherlands. It is o!ned through
Gyprus entities, and it trades through a !hollyo!ned entity called
Metinvest International ".A. !hich is registered in "!it#erland.
Akhmetovs Ukrainian cashflo! is thus subject to "!iss Oovernment
regulation.
Another trading entity called Metinvest 4urasia is identified in the
companys bond prospectuses as responsible for sales to Russia,
Kelarus and other GI" states. Metinvests investment relations
spokesman, Andrei Kondarenko, based at an office in Oeneva, refuses
to say !here Metinvest 4urasia is registered to pay ta5. Metinvest
press and investment relations contact numbers in Aiev ring !ithout
ans!er, and there is no response by the company to emailed :uestions.
Akhmetov o!ns D8.+2< of the Metinvest shares. A 3< shareholding is
held by Glarendale )imited, a vehicle of the former o!ners of Ilyich
"teel. 6he second major stake of +1.D@< belongs to Iadim Eovinskys
"MAR6 group. Eovinsky, an ethnic Russian, is doing less !ell out of
the !ar. ?ays after the Jebruary +8 political change in Aiev, the
Eational Kank of Ukraine put his Jorum Kank into bankruptcy
administration.
Akhmetovs Jirst Ukrainian International Kank /JUIK in 4nglish,
HUMK in Russian0 is alive and kicking. Its releases for the first :uarter
this year claim its assets have gro!n modestly in value, !hile its
income has jumped ahead of its impairments and !riteoffs. 6he
Akhmetov bank profit to March 18 !as the e:uivalent of B8D million.
thats 2+< better than it !as before the 6roubles, a year ago. 6his
result !as achieved !ith very little cash from the Eational Kank of
Ukraine /EKU0 = a fraction of the receipts of rivals Hrivatbank /Igor
Aolomoisky0, ?elta Kank /Gargill of the U"0, Jinance P
Gredit /Aonstantin Qhevago0, Krokbi#nesbank /"ergei Aurchenko0,
and Ii#avi Kank /Iitaliy Oayduk, "ergei )evochkin, and "ergei
6aruta0.
6his !eek, on 9uly +8, the !ar finally caught up !ith Akhmetovs
business !hen artillery struck the Avdiivka Goke Hlant, setting it on
fire for several hours. A Metinvestannouncement avoided identifying
the source of the bombardment. A KKG ne!s bulletin claimed the
incendiaries !ere fired by the Ukrainian military.
johnhelmer.net
Red = steel, iron, coal, and coke plants Avdiivka is no.9; Azovstal no. 1; Ilyich no. 2;
Yenakiieve, no. 3
l!e = ports, incl!din" #ari!pol no. $
%o!rce& Ann!al Report 2'13 pa"e 13
4ven if Akhmetovs steel and bank financial reports omit to report the
impact of the eastern Ukraine conflict, and the Moodys report passes
over !ar risk, holders of Metinvests +,8; BD3, million bonds, !hich
are traded on the Kerlin "tock 45change, are not so sanguine. Jrom
nearpar value at the start of the year, the traded value of the paper
has fallen by 8D<.
johnhelmer.net
%o!rce& http&(())).*oerse+*erlin.co,(
Ky contrast, the +,83 B3,, million bond, traded on the Irish "tock
45change, has been more stable in market value, although the
e5change does not release current prices. 6he ?ragon Gapital chart for
the bond sho!s the yield to maturity improving steadily since the start
of this year.
Akhmetov is also benefiting from the failure of domestic, Russian, or
international analysts to look closely at the impact of the international
aid programmes for Ukraine, !hich started in May. Moodys, for
e5ample, has ignored the costs side of Metinvests business, despite
the obvious gro!th in costs !hich are part of the conditions
accompanying the International Monetary Junds /IMJ0 B8D billion
"tandKy Agreement. Oas, previously identified as about 88< of the
costs of production and sales, should be rising sharply. Action against
Akhmetovs subsidiaries for failing to pay their gas arrears has been
reported this month in the Ukrainian press.
6he IMJ papers do not mention Metinvest, Akhmetov, or individual
mills and proprietors by name. 6he IMJ conditions for funding the
Ukrainian state budget and banking system include an immediate 2,<
increase in the gas tariff, follo!ed by the collection of gas payment
arrears !hich have accumulated to the benefit of industrial users like
Metinvest. Relatedparty lending bet!een the steelmills, coal and iron
ore mines of Metinvest and Akhmetovs HUMK should already be
undergoing scrutiny by independent auditors, supervised by the IMJ.
6he objective of the Junds stress testing is to %gaugMeN the strength of
bank balance sheets, and Rthe best course of action to address any
!eaknesses. In particular, the asset valuation e5ercise aims to ensure
that loan provisions reflect rigorous implementation of EKU loan
classification and provisioning rules, so their true financial condition
and capitali#ation is not distorted.*
In an investor presentation this past April, Metinvest said its debts
totalled B2.1 billion as of ?ecember 18, +,81. ?ebt repayment appears
manageable this year, but a major refinancing !ill be re:uired by ne5t
year.
johnhelmer.net
International banking sources e5press more scepticism of Akhmetovs financial capacity
than his financial presentations and the Moodys rating report suggest. 6he sources note
that Metinvest recently declared a dividend for +,81, enabling Akhmetov and Eovinsky
to help themselves to a payout of B2,, million from the +,81 balancesheet, even though
bottomline profit !as B1-+ million. Relatedparty disclosures in the financial report for
that year sho! that -< of Metoinvest sales go to related parties. 12< of costs come from
relatedparty purchasing. Co! much borro!ing and debt securiti#ation are based on
related parties has not been disclosed.
6he bank sources add that in the civil !ar conditions no! prevailing in
eastern Ukraine, it is far from certain Akhmetov can continue adding
profits, and avoiding losses. A notice from auditors
Hrice(aterhouseGoopers, dated March +;, claims %the operations of
the Oroup, and those of other entities in Ukraine, have been affected
and may continue to be affected for the foreseeable future by the
continuing political and economic uncertainties in Ukraine. &ur
opinion is not :ualified in respect of this matter.* "teel industry
sources say they dont kno! !hat this means.
(estern and Russian sources say they are counting on the IMJ to
investigate the relationship bet!een Akhmetovs bank and Metinvests
units in order to assess Akhmetovs vulnerabilities. Ukrainian steel
sources say that Akhmetov has fe! assets e5posed in a combat #one.
6he main plants, they say, are !orking normally.
6he picture for Metinvests coal mines is less optimistic. )ocal press
reports from the ?onetsk and )ugansk regions indicate that several
mines have been forced to close, and production !as sharply curtailed
in 9une. Miners going to their jobs have come under attack this month,
and have stopped !ork.
-his article ori"inally appeared at .ances /ith ears. 0ohn 1el,er
is the lon"est contin!o!sly servin" 2orei"n correspondent in R!ssia,
and the only )estern 3o!rnalist to direct his o)n *!rea! independent
o2 sin"le national or co,,ercial ties. 4opyri"ht 2'15.
Read more: http://johnhelmer.net/?p=11188#ixzz38OcickbW
O! WHAT A LUCRATIVE WAR IN EASTERN UKRAINE RINAT
AKHMETOV IS HAVING, SO FAR
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By John Helmer, Moscow
Rinat Akhmetov (lead image, aove le!t and right" is still the #kraine$s richest man% &! yo' elieve
the !inancial re(orts )'st iss'ed y his Metinvest gro'(, #kraine$s largest steel, iron-ore, coal and
coke maker, it$s a case o! his singing all the way to the ank in *wit+erland , witho't the irony o!
the m'sical, -./ 0hat A 1ovely 0ar/2
A new ratings re(ort iss'ed y Moodys claims that Metinvest is ene!itting !rom -the com(any$s
aility to generate (ositive cash !lows even in times o! a severe downt'rn as oserved in 3445 and
more recently6 (3" low leverage6 (7" high degree o! vertical integration6 (8" large iron ore reserves6
and (9" the geogra(hically advantageo's location o! some o! its ma)or assets%2 E:actly what
advantage the geogra(hy o! eastern #kraine is con!erring on Akhmetov$s 'siness Moody$s analysts
don$t say%
The worst Moodys can think o! in the short term !or Akhmetov is that -downward (ress're co'ld e
e:erted on Metinvest$s rating as a res'lt o! a !'rther (otential downgrade o! the sovereign rating
and;or !'rther lowering o! the !oreign-c'rrency ond co'ntry ceiling%2
The Moodys re(ort was iss'ed on A(ril <4% The good news has contin'ed to stream in !rom the, er,
eastern !ront% &n the J'ne ='arter, Metinvest anno'ncedon J'ly <>, cr'de steel o't('t was '( >?
on the March ='arter, and iron-ore concentrate grew y 8? over the same interval% The !irst-hal!
res'lts weren$t as good, y com(arison with a year ago @ steel (rod'ction down >?, iron-ore
concentrate down 7?, raw coking coal down 3<?% The only clo'd in the sky, according to the
com(any re(ort, was snow , -adverse weather conditions, which led to railcar ottlenecks d'e to
snow on the tracks% &n A(ril-May, the enter(rises stailised (rod'ction, com(ensating !or the dro(
in the (revio's ='arter%2
The word -war2 doesn$t a((ear in the com(any$s
(a(erwork% &nstead, the decrease o! steel (rod'ction at
the Aenakiieve mill (right" @ located 84 kilometres
northeast o! Bonetsk, in se(aratist or contested territory
@ has een e:(lained y -a ma)or overha'l o! last
!'rnace no% 7% &n t'rn, this and a ma)or overha'l o! asic
o:ygen !'rnace no% < in May-J'ne 34<8 ca'sed steel
o't('t to !all y 9C tho'sand tonnes%2 0hat was lost at
Aenakiive, Akhmetov$s acco'ntants claim, was made '(
!or y (rod'ction growth at the A+ovstal (lower le!t" and &lyich *teel (right" mills, oth located at
the (ort city o! Mari'(ol, <84 kilometres d'e so'th o! Bonetsk%
&n the second, Akhmetov moili+ed his men to (rotect the mill !rom !ormations o! #krainian
se(aratists% -Tho'sands o! steelworkers,2 Metinvest claimed on May <C, -!anned o't on Th'rsday
thro'gh the city o! Mari'(ol, estalishing control over the streets and anishing the (ro-Dremlin
militants who 'ntil recently had seemed to e consolidating their gri( on (ower, dealing a setack
to R'ssia and (ossily reversing the moment'm in eastern #kraine%2 1ocal (ress re(orts ('t the
n'mer in the h'ndreds%
According to a se(arate re(ort on the !inancial (er!ormance (o! Akhmetov$s steelmills, iss'ed !or
the !irst ='arter in May, sales reven'es sli((ed in the (eriod to E3%5 illion6 that was down >?
com(ared to the March ='arter o! 34<7% However, earnings (Eitda" )'m(ed 5<? to E>F> million%
Got only doesn$t the #krainian war !eat're in this (er!ormance6 't the R'ssian market is also
invisile% The sales reven'e n'mer declined, the com(any says, eca'se Metinvest$s domestic
market, acco'nting !or more than a ='arter o! sales, contracted% -Reven'es in #kraine totalled
#*EF7C million in <H 34<8, down <<? y-o-y% Bes(ite steady sales o! iron ore (rod'cts on the
domestic market, sales o! steel (rod'cts declined amid lower demand in the ma)or steel cons'ming
sectors (constr'ction, machine-'ilding and (i(eline in!rastr'ct're"%2 .n the other hand, e:(ort
sales com(ensated slightly, rising <? year on year% 0ar (roved to e good !or 'siness, at least in
&ra=, *yria, Egy(t, and 1iya% -The (ro(ortion o! sales to the Middle East and Gorth A!rica (MEGA"
rose y C (( y-o-y to 34?, driven y greater vol'mes o! semi!inished and !lat (rod'cts% The share
o! sales to the Iommonwealth o! &nde(endent *tates (I&*, e:cl'ding #kraine" was down 8 (( to
F? d'e to lower vol'mes o! !inished steel (rod'cts, mainly to R'ssia%2 The R'ssian market
com(rised <<? o! Akhmetov$s e:(ort sales in 34<76 it was down to F? y March o! this year%
E:(ort sales to E'ro(e were !o'r times more val'ale, and they have een growing y <?%
The last time I spoke with Victor Yanukovych in Donetsk on February 22, Akhmetov sai later!
"onsierin# the situation in the country, I persuae him to retire! $ource% https%&&news!pn&
.n the earnings !ront, Akhmetov did (artic'larly well o't o! the overthrow o! President Jictor
Aan'kovich$s government in Ker'ary, and the dramatic c't in the costs o! his (rod'ction which has
!ollowed, as the e:change val'e o! the hryvnia colla(sed% -The rise in consolidated EB&TBA was
(rimarily attri'tale to hryvnia deval'ation, which added #*E74< million y-o-y to the total% .ther
key drivers o! EB&TBA growth wereL !alling market (rices !or coking coal, scra( metals and
!erroalloys, which red'ced costs y #*E93 million overall6 lower gas cons'm(tion d'e to the la'nch
o! PI& at &lyich *teel, a !all in gas (rice y-o-y and the o(timisation o! tem(erat'res in metall'rgical
(rocesses, which ro'ght savings o! #*E98 million overall6 MandN lower distri'tion costs o! #*E<3
million d'e to decreases in railway tari!!s !ollowing the hryvnia deval'ation%2
Metinvest is registered in The Getherlands% &t is owned thro'gh Iy(r's entities, and it trades
thro'gh a wholly-owned entity called Metinvest &nternational *%A% which is registered in
*wit+erland% Akhmetov$s #krainian cash!low is th's s')ect to *wiss Oovernment reg'lation%
Another trading entity called Metinvest E'rasia is identi!ied in the com(any$s ond (ros(ect'ses as
res(onsile !or sales to R'ssia, Belar's and other I&* states% Metinvest$s investment relations
s(okesman, Andrei Bondarenko, ased at an o!!ice in Oeneva, re!'ses to say where Metinvest
E'rasia is registered to (ay ta:% Metinvest (ress and investment relations contact n'mers in Diev
ring witho't answer, and there is no res(onse y the com(any to emailed ='estions%
Akhmetov (right" owns F<%38? o! the Metinvest shares% A 9?
shareholding is held y Ilarendale 1imited, a vehicle o! the !ormer
owners o! &lyich *teel% The second ma)or stake o! 37%FC? elongs
to Jadim Govinsky$s *MART gro'(% Govinsky (le!t", an ethnic
R'ssian, is doing less well o't o! the war% Bays a!ter the Ker'ary
3< (olitical change in Diev, the Gational Bank o! #kraine ('t his
Kor'm Bank into ankr'(tcy administration%
Akhmetov$s Kirst #krainian &nternational Bank (K#&B in English,
P#MB in R'ssian" is alive and kicking% &ts releases !or the !irst
='arter this year claim its assets have grown modestly in val'e,
while its income has )'m(ed ahead o! its im(airments and write-
o!!s% The Akhmetov ank (ro!it to March 7< was the e='ivalent o! E<F million6 that$s 83? etter
than it was e!ore the Tro'les, a year ago% This res'lt was achieved with very little cash !rom the
Gational Bank o! #kraine (GB#" @ a !raction o! the recei(ts o! rivals Privatank (&gor Dolomoisky",
Belta Bank (Iargill o! the #*", Kinance P Iredit (Donstantin Qhevago", Broki+nesank (*ergei
D'rchenko", and Ji+avi Bank (Jitaliy Oayd'k, *ergei 1evochkin, and *ergei Tar'ta"%
This week, on J'ly 3<, the war !inally ca'ght '( with Akhmetov$s 'siness when artillery str'ck the
Avdiivka Ioke Plant, setting it on !ire !or several ho'rs% A Metinvest anno'ncement avoided
identi!ying the so'rce o! the omardment% A BBI news 'lletin claimed the incendiaries were !ired
y the #krainian military%
'e ( steel, iron, coal, an coke plants ) Aviivka is no!*+ A,ovstal no! -+ Ilyich no! 2+ Yenakiieve,
no! .
/lue ( ports, incluin# 0ariupol no! 1
$ource% Annual 'eport 22-. ) pa#e -.
Even i! Akhmetov$s steel and ank !inancial re(orts omit to re(ort the im(act o! the eastern
#kraine con!lict, and the Moody$s re(ort (asses over war risk, holders o! Metinvest$s 34<> EF94
million onds, which are traded on the Berlin *tock E:change, are not so sang'ine% Krom near-(ar
val'e at the start o! the year, the traded val'e o! the (a(er has !allen y <F?%
$ource% http%&&www!boerse3berlin!com&
By contrast, the 34<9 E944 million ond, traded on the &rish *tock E:change, has een more stale
in market val'e, altho'gh the e:change does not release c'rrent (rices% The Bragon Ia(ital chart
!or the ond shows the yield to mat'rity im(roving steadily since the start o! this year%
Akhmetov is also ene!iting !rom the !ail're o! domestic, R'ssian, or international analysts to look
closely at the im(act o! the international aid (rogrammes !or #kraine, which started in May%
Moodys, !or e:am(le, has ignored the costs side o! Metinvest$s 'siness, des(ite the ovio's
growth in costs which are (art o! the conditions accom(anying the &nternational Monetary K'nd$s
(&MK" E<F illion *tand-By Agreement% Oas, (revio'sly identi!ied as ao't <<? o! the costs o!
(rod'ction and sales, sho'ld e rising shar(ly% Action against Akhmetov$s s'sidiaries !or !ailing to
(ay their gas arrears has een re(orted this month in the #krainian (ress%
The &MK (a(ers do not mention Metinvest, Akhmetov, or individ'al mills and (ro(rietors y name%
The &MK conditions !or !'nding the #krainian state 'dget and anking system incl'de an
immediate 84? increase in the gas tari!!, !ollowed y the collection o! gas (ayment arrears which
have acc'm'lated to the ene!it o! ind'strial 'sers like Metinvest% Related-(arty lending etween
the steelmills, coal and iron-ore mines o! Metinvest and Akhmetov$s P#MB sho'ld already e
'ndergoing scr'tiny y inde(endent a'ditors, s'(ervised y the &MK% The o)ective o! the K'nd$s
stress testing is to -ga'gMeN the strength o! ank alance sheets, and Rthe est co'rse o! action to
address any weaknesses% &n (artic'lar, the asset val'ation e:ercise aims to ens're that loan
(rovisions re!lect rigoro's im(lementation o! GB# loan classi!ication and (rovisioning r'les, so their
tr'e !inancial condition and ca(itali+ation is not distorted%2
&n an investor (resentation this (ast A(ril, Metinvest said its dets totalled E8%7 illion as o!
Becemer 7<, 34<7% Bet re(ayment a((ears manageale this year, 't a ma)or re!inancing will e
re='ired y ne:t year%
Click to enlarge
&nternational anking so'rces e:(ress more sce(ticism o! Akhmetov$s !inancial ca(acity than his
!inancial (resentations and the Moodys rating re(ort s'ggest% The so'rces note that Metinvest
recently declared a dividend !or 34<7, enaling Akhmetov and Govinsky to hel( themselves to a
(ayo't o! E844 million !rom the34<7 alance-sheet, even tho'gh ottom-line (ro!it was E753
million% Related-(arty disclos'res in the !inancial re(ort !or that year show that 5? o! Metoinvest
sales go to related (arties6 78? o! costs come !rom related-(arty ('rchasing% How m'ch
orrowing and det sec'riti+ation are ased on related (arties has not een disclosed%
The ank so'rces add that in the civil war conditions now (revailing in eastern #kraine, it is !ar
!rom certain Akhmetov can contin'e adding (ro!its, and avoiding losses% A notice !rom a'ditors
Price0aterho'seIoo(ers, dated March 3>, claims -the o(erations o! the Oro'(, and those o! other
entities in #kraine, have een a!!ected and may contin'e to e a!!ected !or the !oreseeale !'t're
y the contin'ing (olitical and economic 'ncertainties in #kraine% .'r o(inion is not ='ali!ied in
res(ect o! this matter%2 *teel ind'stry so'rces say they don$t know what this means%
0estern and R'ssian so'rces say they are co'nting on the &MK to investigate the relationshi(
etween Akhmetov$s ank and Metinvest$s 'nits in order to assess Akhmetov$s v'lnerailities%
#krainian steel so'rces say that Akhmetov has !ew assets e:(osed in a comat +one% The main
(lants, they say, are working normally%
The (ict're !or Metinvest$s coal mines is less o(timistic% 1ocal (ress re(orts !rom the Bonetsk and
1'gansk regions indicate that several mines have een !orced to close, and (rod'ction was shar(ly
c'rtailed in J'ne% Miners going to their )os have come 'nder attack this month, and have sto((ed
work%
in*hare
y John Helmer - Th'rsday, J'ly 38th, 34<8