Putin allows Moscow firm to buy Siberian coal miner from Coeclerici

KEMEROVO. June 17 (Interfax) - President Vladimir Putin has granted permission for Moscow-based Luchshee Reshenie to acquire 100% of Kuznetsk Investment & Construction Company (Kuznetskinveststroy), a coal miner in Kemerovo Region, from Italy's Coeclerici Group.

He issued an order to "allow JSC Luchshee Reshenie to carry out transactions to acquire 109,999,999 common shares [in Kuznetskinveststroy] owned by Coeclerici Commodities S.A., and one common share in this joint-stock company owned by Coeclerici Russia."

This permission is being granted in line with Point 5 of the presidential decree issued on August 5, 2022 "On special economic measures in the finance and fuel and energy sectors in connection with the unfriendly actions of certain foreign states and international organizations," the order said.

Kuznetskinveststroy's equity consists of 110 million common shares with par value of 1 ruble each, according to the company's charter. Luchshee Reshenie has therefore been given the green light to acquire 100% of the miner.

"The receipt of other permission, decisions, consent, approvals and other permit documents is not required to carry out the transactions specified in the current order," the order said.

Luchshee Reshenie was registered in Moscow on November 1, 2022 with the core business of "consulting on issues of commercial activities and management," the Unified State Register of Legal Entities showed. The company was founded by Orion-1 Specialized Financial Company LLC, which in turn is owned by the Orion fund.

Several coal industry sources told Interfax in April that Coeclerici was selling Kuznetskinveststroy to Moscow-based Okto Ugol LLC. Coeclerici denied this and said it was looking for a strategic partner for the coal miner.

"Coeclerici Commodities S.A. has been looking for a qualified Russian partner for the joint development of Kuznetskinvestroy and expansion of its operations for several years already. The search for such a partner continues," the Italian company said.

Coeclerici Group said on its website earlier that it had ceased to carry out management and coordinating activities in regard to Kuznetskinveststroy in light of the Russian-Ukrainian conflict.

Kuznetskinveststroy's only mining asset is the Korchakolsky open-pit mine, which produces T and KS rank coal that is used to make pulverized coal fuel for metallurgy. The company reported that it reduced coal production to 1.095 million tonnes in 2023 from 1.328 million tonnes in 2022 and shipments fell to 1.1 million tonnes from 1.4 million tonnes.

Kuznetskinveststroy's net profit to Russian Accounting Standards plunged 95% to 67 million rubles in 2023 on revenue up 9.4% to 11.9 billion rubles.