Ukranian TV viewers watched agog as representatives of the world’s two biggest steel groups, Mittal and Arcelor, drove up the price for their country’s largest metals producer, Kryvorizhstal, in a frenzied auction carried out before the cameras.
The auction saw Mittal Steel, the world’s biggest steel producer that is controlled by Lakshmi Mittal, Britain’s richest man, secure control of the Ukrainian steel mill with a killer bid of 24,2-billion hryvna — £2,7-billion.
The early stages had swiftly seen off the locally based LLCSmart-Group, after Arcelor and its Ukrainian partner opened the bidding at £1,4-billion.
The auctioneer, eye-witnesses said, raised his gavel and counted out one, two, before Arcelor and Mittal raised their offers by lifting white placards offering another £10-million. With its winning bid Mittal takes 93% of Kryvorizhstal.
The auction was the latest stage in Ukraine’s Orange Revolution, the pro-democracy movement headed by Viktor Yushchenko, the politician poisoned and disfigured for life by his opponents. Now president, he is set on leading his country into eventual membership of the European Union.
The televised auction was an exercise in transparency designed to prove to fractious Western companies that Ukraine is a good place to do business.
Yushchenko ignored a parliamentary vote to halt the sale. Even his own erstwhile supporters were unhappy. Mittal was forced to brush past demonstrators holding aloft placards saying: ”The people own Kryvorizhstal.”
Valentyna Semenyuk, head of Ukraine’s state property fund which conducted the sale, resigned in protest from her hospital bed, where she was admitted over the weekend with high blood pressure.
The plant, which accounts for 20% of the country’s metal output and is worth a fifth of its national budget, had sales last year of £950-million.
Yushchenko plans to use the proceeds to fund social programmes and cut the country’s debt. — Â