Ukrainian Property Fund gains control of 97.5% of Zaporozhye Aluminum Plant

MOSCOW. Feb 26 (Interfax) - Ukraine's State Property Fund has increased its stake in JSC Zaporozhye Aluminum Plant, in which it owned 68% of the shares, to 97.5%.

"Ukraine's State Property Fund has expanded control over the Zaporozhye Aluminum Plant. By decision of the High Anti-Corruption Court, 29.54% of the plant's shares, which were at the disposal of the Russian oligarch Deripaska, were transferred to Fund's management," Ukrainian media reported, citing a statement on the State Property Fund's website.

"This is another step towards making Russian property in Ukraine work for the Ukrainian economy," Fund chairman Vitaly Koval said in the press release, adding that the State Property Fund "continues to work with sanctioned assets."

The State Property Fund said last spring that it, together with the new management of JSC Zaporozhye Aluminum Plant, was preparing the enterprise for privatization.

According to the State Property Fund, Avtovaz-Invest acquired a 68% stake in the plant in 2001. Later, in 2006, Velbay Holdings Limited, controlled by Rusal became the new owner of this asset. Oleg Deripaska was the main beneficiary of Rusal at the time. Subsequently, the businessman's companies acquired another 29.5% stake in the plant. As a result, Deripaska gained control of 97.5% of the shares of Zaporozhye Aluminum Plant. However, in 2015, the Ukrainian authorities, as a result of litigation, returned a 68% stake to state ownership, transferring it to the State Property Fund. The remaining 29.5% stake was expropriated in February 2023 by the High Anti-Corruption Court following action brought by the Ukrainian Justice Ministry.

Zaporozhye Aluminum Plant used to be Ukraine's only producer of primary aluminum with capacity to smelt more than 100,000 tonnes of aluminum per year.

The enterprise has gradually scaled down operations, shutting its alumina division in March 2009, the electrolysis shop that produced primary aluminum in April 2011 and, finally, its foundry in July 2014.

The company's main sources of income are the lease of property and the sale of assets and inventories. The company is running at a loss.