The debt owed by the State Fiscal Service to Metinvest international vertically integrated mining and metal group for value added tax (VAT) refunds for exported products reached UAH 3.5 billion and exceeds the defaulted debts of the holding to foreign creditors, Metinvest CEO Yuriy Ryzhenkov said at the National Export Forum in Kyiv on Thursday.

"The debt [for VAT refunds] confirmed by us and the state is UAH 3.5 billion. Unfortunately, we don't see serious progress at the end of last year when the debt totaled some UAH 2 billion. We had certain sums refunded, but we continue operating and exporting, and this does not cover VAT amounts appearing – it continues swelling," he said.

Ryzhenkov said that the VAT problems considerably worsen the company's economic situation.

"This is a rather complicated situation for us, as the company's economy is built on the assumption that laws in the country are working and VAT is paid on time," he said.

Ryzhenkov said that VAT refunding is not crediting the company, as the company has paid the money to the budget.

"The state has received it, and now under Ukrainian law it is obliged to return it to the company," he said.

Ryzhenkov said that the defaulted debt of Metinvest holding to foreign creditors has reached $113 million, which was why it announced the so-called "restricted technical default" of the company. The debt of the state to Metinvest solely for VAT has reached $150 million under the current exchange rate.

"If the fiscal service works normally and VAT is refunded, we could calmly work with our creditors and not think about the postponement of terms of debt payments," he said.

Metinvest is a vertically integrated group of mining companies that manages assets in every link of the production chain, from iron ore and coke production to semi-finished and finished steel products and rolled metal piping, as well as the production of other goods with high added value.