FEBRUARY 12, 2005
The steel business in the Ukraine
Students of the real world in Formula 1 will have noticed that last week the new Ukrainian government headed by Yulia Timoshenko announced that it is to reverse the controversial sale of the state-owned Kryvorizhstal steel works so that the firm can go back on the market at a higher price. One of the world's largest steel plants was sold last year to a group of investors that included the son-in-law of former President Leonid Kuchma. The winning bid was $800m and higher bids from foreign companies were rejected. Timoshenko said her government was cancelling "illegal" decisions by the former administration. It remains to be seen how the government will decide which deals were correct and which were not.
One would assume that all is well with the sale of the sale of the Zaporozhstal steel works in 1997. This was acquired from the government by Midland, which recently became the owner of the Jordan Formula 1 team. The Midland empire, which is now largely outside the Ukraine, was founded on the success of Zaporozhstal.
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