Russian oligarch Roman Abramovich sold off the last of his Ukrainian steelmaking business this week, as his business empire in Ukraine dwindles to one transport company.
Through his company Evraz, the 51-year-old oligarch has sold two steelmaking properties for $216 million over the past year: the Sukha Balka iron mine in Krivyi Rih, and the Dniprovsky Metallurgical Plant in Dnipro, sold this week.
Kharkiv businessman Aleksandr Yaroslavsky bought the two properties, with fellow oligarch Rinat Akhmetov taking a coking and iron enrichment plant.
The sales signal Abramovich’s near-total departure from Ukraine, leaving only EvrazTrans Ukraine, a transport company that moves iron from Sukha Balka to the steel plant.
“It’s a good company, and with it we will stay in Ukraine,” said Denis Novozhenov, a Evraz spokesman, in comments to Interfax-Ukraine.
Until 2017, Abramovich owned Sukha Balka and the Dniprovsky steel mill, as well as the Yuzhny coking plant and the Yuzhny iron enrichment plant, giving the Russian oligarch an integrated steelmaking holding all on Ukrainian territory.
The Kremlin-linked billionaire came to possess the assets in a murky 2009 deal with Ukrainian oligarch Ihor Kolomoisky that went awry after Kolomoisky allegedly failed to pay Abramovich part of what he owed under the agreement.
Russian President Vladimir Putin commented on the case in 2014 after Kolomoisky became governor of Dnipropetrovsk oblast, calling the Ukrainian billionaire a “unique swindler.”
Vertically integrating
The sales come amid fervor in Ukraine to rid the country of Russian businesses, with nationalist groups periodically holding demonstrations outside state-owned Russian bank Sberbank to demand the lender’s retreat from Ukraine.
But Abramovich also faces a challenging political environment within Russia, where his close Kremlin ties place his extensive foreign holdings in ambiguous political territory, but could also serve as leverage for the oligarch.
“Evraz selling its Ukrainian assets makes sense because it reduces the company’s political risks,” wrote Concorde Capital analyst Dmytro Khoroshun in a research note.
“Notably, Yaroslavsky is forming a small metals and mining holding,” he added.
Yaroslavsky appears to have paid at least $216 million to purchase the iron mine and steel mill. He also bought a controlling stake in the Kharkiv Tractor Factory last year from Austrian investor Siegfried Wolf, a businessman with ties to Russian oligarch Oleg Deripaska.
At a March 6 press conference, Yaroslavsky said he would “try to achieve synergy, as Dniprovsky does metallurgical production, and the Kharkiv Tractor Factory consumes a lot of metal. And Dniprovsky consumes the production of Sukha Balka.”
