Page 65 - UKRRptMar21

Metinvest might pay dividends to its shareholders with cash left after the financing of its higher priorities, the foremost of, which are CapEx and debt service, according to Lyubarev. Metinvest’s cumulative dividend payouts will be below $400mn until the company publishes its 1H21 results in 3Q21, Lyubarev said. Metinvest also wants to maintain a minimum cash balance of at least $200mn, which might need to be higher under the current market conditions of elevated prices.
Metinvest plans to increase its stake in the Pokrovske coal business to 50.01% from the current 24.77% by the end of 2021, Lyubarev said, adding that exceeding the 50% threshold will cause Metinvest to start consolidating the assets comprising the Pokrovske coal business as subsidiaries. The consolidation will add $500mn of debt to Metinvest’s balance sheet and increase its EBITDA by at least $120mn per year when coal prices are low (and potentially in excess of $200mn per year when coal prices are high). There is also a potential for further EBITDA increase if the Pokrovske coal business boosts its production volumes to 4 mmt of concentrate per year or more, Lyubarev said.
Metinvest might also set off ​the $77mn 2020 payment​ under a guarantee against its future payments for corporate rights in the Pokrovske coal business, according to Lyubarev. Metinvest might purchase the remaining 49.99% of the Pokrovske coal business in 2022.
Steel production at Ukraine’s largest producer​ ​Metinvest​ was 25.2 kt per day (or 780 kt per month) in January​, a 3.3% m/m increase, according to Concorde Capital’s analysis of separate news reports by Interfax-Ukraine. Ilyich Steel reported a 4.3% m/m gain in steel production to 11.6 kt per day, while Azovstal’s output rose 2.4% m/m to 13.5 kt per day in January. The holding's hot iron output increased 5.7% m/m to 23.4 kt per day.
Ukraine’s largest steel producer​ ​Metinvest​ might participate in a tender for the PP&E assets of Dniprovskyy Steel, ​a Ukrainian steel plant, according to Metinvest’s February 11 comments to Interfax-Ukraine. The news agency reported on the same day that the Antimonopoly Committee of Ukraine (AMCU) on February 10 started its consideration of allowing Metinvest to acquire Dniprovskyy Steel PP&E assets. Metinvest has not decided whether it will participate in a tender for Dniprovskyy Steel PP&E assets, according to the holding’s response to Interfax-Ukraine in, which Metinvest mentioned the poor technical conditions of Dniprovskyy Steel assets as a factor preventing the holding from bidding for them. On January 28, the AMCU issued permission to Optimal Trade LLC, a Ukrainian commodity trader, to acquire Dniprovskyy Steel PP&E assets.
Metinvest​ affiliate Pokrovske Coal plans to boost output 30% in 2021. Private joint stock company Pokrovske Coal plans to boost its output of raw coking coal to 8 mmt (21.9 kt per day) in 2021, a 30% y/y jump, according to the company’s March 2 press release as reported by Interfax-Ukraine.​ ​Recall, in 2020, Pokrovske Coal ​produced 6.13 mmt of coal​ (16.8 kt per day), a 22.6% y/y rise. In 2019, Pokrovske Coal produced 5.0 mmt of coal (13.7 kt per day), a 25.8% y/y jump.​ M​ etinvest (METINV), Ukraine's largest steelmaker, owns 25% of Pokrovske Coal assets and ​recently received permission​ from the Antimonopoly Committee of Ukraine to acquire the remaining 75%.
65​ UKRAINE Country Report​ March 2021 ​ ​www.intellinews.com