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Rinat Akhmetov will pay a billion hryvnia to strengthen the defense capability of Ukraine


The key metallurgical assets of the richest Ukrainian businessman are concentrated in the Donetsk region, which was recently recognized as independent from Ukraine by Russian President Vladimir Putin. The potential loss of the Mariupol factories will cost Rinat Akhmetov's business up to 40% of the gross annual profit.

Rinat Akhmetov will pay a billion hryvnia to strengthen the defense capability of Ukraine

The owner of a controlling stake in the Dutch mining and metallurgical holding Metinvest B.V. (Metinvest) Rinat Akhmetov announced the payment of 1 billion hryvnia in taxes in advance to strengthen the defense capability of Ukraine, where his main raw materials and steel assets are located.

“I have repeatedly said and repeat again that our common goal is a strong, peaceful, independent, integral Ukraine within the borders recognized by international law. Everyone in their area must do everything to strengthen the country,” he said in a comment given to Interfax-Ukraine on Tuesday evening.

“The threat of invasion needs maximum unity. This applies to both government and business, and all citizens of Ukraine without exception. Unity is now a matter of the country's survival,” Akhmetov said.

“Now more than ever, Ukraine needs the stability of public finances. Business should help the state in this. SCM's business will pay taxes in advance - in the amount of UAH 1 billion. I would like to emphasize that no matter how terrible scenarios we may be afraid of, SCM Group enterprises will carry out all the investments that we talked about in our plans for 2022. In particular, in Mariupol,” the businessman said in a comment.

“But our most important value is people. I am convinced that business should share assistance to people with the state. I have already given orders to my charitable foundation. If necessary, they will help with evacuation, medicines, everything that will be needed. We will do everything to prevent a humanitarian catastrophe. Where exactly our efforts will be directed will be decided by my charitable foundation together with businesses, local and central authorities,” he said.

If Metinvest loses its assets in the Donetsk region (Azovstal, Ilyich Iron and Steel Works, Pokrovskugol, Avdiivka Coke Plant), but retains GOKs in Kryvyi Rih, then the company will lose up to 40-50% of its EBITDA profit, an analyst at Concorde Capital notes Dmitry Khoroshun.

After Russia recognizes the occupied areas of Donetsk and Luhansk regions as "republics" within their administrative borders, the risk of increased escalation and a full-scale Russian invasion of Ukraine remains high.

“According to my calculations, from January 2011 to October 2021, the entire metallurgy division of Metinvest earned 26% of the EBITDA of the entire group,” says Khoroshun. “Nevertheless, Metinvest will be financially able, with a high probability, to continue servicing existing debts and even develop GOKs.”

Recall that Rinat Akhmetov and Vadim Novinsky, co-owners of the Metinvest group, visited their assets in Mariupol last week, where they promised to raise staff salaries and invest more than a billion dollars in the development of metallurgical production.

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