Ukrainian appeals court upholds nationalization of LSR plants, co to turn to European arbitration
MOSCOW. Oct 13 (Interfax) - The Appeals Chamber of Ukraine's High Anti-Corruption Court (HACC) has upheld a decision to nationalize 100% of the corporate rights of Aeroc LLC, a subsidiary of Russia's LSR Group that owns two autoclaved aerated concrete plants in Ukraine, Ukrainian media reported, citing a statement from the court's press service.
Following a review, the panel of judges left unchanged the HACC decision to seize for the state 100% of the charter capital of the Ukrainian company in the amount of UAH437.44 million ($12 million at current exchange rate) with which Russian company PJSC LSR Group could carry out actions tantamount to legal control through a German company, the court said on its website.
The ruling went into effect upon its announcement and cannot be appealed.
LSR Group, a major Russian construction company and building materials manufacturer, told Interfax that since "all legal instruments in Ukraine have now been exhausted, the company plans to turn to European arbitration tribunals as was previously said."
A report in August citing Ukraine's State Bureau of Investigation said that the HACC ordered the seizure of 100% of Aeroc corporate rights for the state in lawsuit filed by Ukraine's Justice Ministry based on Point 1-1 of Part 1 of Article 4 of the country's law on sanctions.
LSR Group said at the time that it planned to challenge this decision "by all available legal means" and that it "reserves the right to appeal to European arbitration tribunals." It was preparing an appeal at the time.
Ukraine imposed sanctions in May against Aeroc Investment Deutschland GmbH, the direct owner of Aeroc LLC, the assets of which were frozen in June 2022.
Aeroc LLC, which has been working on the Ukrainian market since December 2006, is one of the leaders on the country's cellular concrete market. As of the end of 2021 (most recent published data), Aeroc LLC was wholly owned by LSR Group, the latter said in its report for 2021.
LSR Group, which was founded in 1993, has a real estate development division and construction materials division, and also provides construction services. The group has units that mine and process nonmetallic minerals, produce and transport building materials, and build buildings. The group's business is concentrated primarily in St. Petersburg and Leningrad Region, Moscow and the surrounding region, and Yekaterinburg and the Ural region.
The official exchange rate was UAH36.57/$1 on October 12.