Metinvest considers AMCU's requirements regarding acquisition of DMK unjustified due to enterprise's worn-out state
The international vertically integrated mining and metallurgical group of companies Metinvest considers unreasonable the requirements of the Antimonopoly Committee of Ukraine (AMCU) regarding the acquisition of PJSC Dniprovsky Iron and Steel Works (DMK, Kamianske, Dnipropetrovsk region), which is part of the corporation Industrial Union of Donbas.
According to the company's statement made on Friday, the AMCU brought up the outdated restrictions on participation in the bidding for the purchase of DMK, when it was said that in case of winning the auction, the AMCU intends to oblige Metinvest to sell at least 12,000 tonnes of commercial pig iron to third parties annually during three years.
"To participate in the auction, Metinvest sent an appeal to the AMCU back in 2020, however, the consideration of the application took a long time, despite the limited period of rehabilitation of the DMK. The Metinvest Group considers the established obligations of the AMCU to be unreasonable, the terms of consideration of the application are protracted, and the attitude towards the group is biased," the statement says.
At the same time, it is explained that the main assortment of products manufactured by DMK does not coincide with the assortment of products of the Metinvest group. Other market participants have the opportunity to satisfy the demand for commercial pig iron in the amount that is included in the obligations of Metinvest. Accordingly, the company finds itself in a deliberately losing position in the sale of commercial pig iron.
According to the group, the establishment of obligations for Metinvest reduces the investment attractiveness of the depreciated assets of DMK and creates an unequal playing field compared to other potential bidders.
"Obligations to sell commercial pig iron to third parties create obstacles to the consolidation of DMK's assets into a group, thereby limiting the possibilities for long-term investment planning," the statement says.
As reported, in early May of this year, the Antimonopoly Committee of Ukraine requested the opinion of market participants, in particular metallurgical enterprises, regarding the voluntary restrictions of the country's largest mining and metallurgical holding, the Metinvest group, in the event that it gains indirect control over the DMK. At the same time, the AMCU published the obligations proposed by the Metinvest group within the framework of the case on economic concentration.