Privat Group

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The Privat Group, or Privatbank Group (Ukrainian: Група “Приват”) is an influential business group in Ukraine grouped around the Privatbank. The group is controlled by the Ukrainian businessmen Henadiy Boholyubov, Oleksiy Martynov, and Ihor Kolomoysky (the latter being the leading partner, best known to public). Privat Group controls steel, oil, chemical, energy and food industry companies in Ukraine, Russia, Romania and the United States. Most businesses of the group (including Privatbank itself) are based in Dnipropetrovsk Oblast, which is regarded as its “homeland”. Being a business oligarch entity, Privat Group controls several Ukrainian media, maintains close relations with politicians and sponsors professional sports.

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[edit] Structure

The businesses of Privat Group are not formally included in a corporation, and its top managers sometimes state that there is no such group at all.[1] However, either PrivatBank or "Privat-Intertrading" company indirectly own all companies regarded as parts of the group. Typically, industrial companies are controlled through a complicated chain of offshore companies. Despite this, the Ukrainian public has a clear understanding of what exactly belongs to the group. To describe such relations, the media use the wording “company X is controlled by the Privat Group" or "the business of the X company is being organized by the PrivatBank". The group never denies such statements.

[edit] Steel industry

Various steel companies form the core of the Privat Group, presenting a full manufacturing chain of metallurgy. This oldest and most important part of the group is mostly located in and around Dnipropetrovsk (location specified in parenthesises below).

[edit] Ore mining and processing companies

  • Marhanets Mining&Processing Kombinat and Ordzhonikidze Mining&Processing Kombinat extract and enrich ferroalloy ores, controlling the domestic market of this raw material (cities of Marhanets and Ordzhonikidze, respectively)
  • “Suha Balka” JSC extracts iron ore (Kryvyi Rih)
  • Pivdennyi Mining&Processing Kombinat (co-owned with Vadim Novinskyi) extracts and enriches iron ore (also in Kryvyi Rih)

[edit] Coke-Chemical plants

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[edit] Ferroalloy mills

Apart from its ferroalloy-ore assets, Privat Group has stakes in all three of Ukraine's ferroalloy mills and controls two of them.

  • Nikopol Ferroalloys Plant, the world's second ferroalloy manufacturer (co-owned and fiercely fought over with the Interpipe Group) (Nikopol)
  • Stakhhanov Ferroalloys Plant (Stakhanov, Luhansk Oblast of Ukraine)
  • Zaporizhzhia Ferroalloys Plant (Zaporizhzhia)
  • Alapayevsk Metallurgy Plant (Alapayevsk, Russia)
  • Ferroalloys company in Romania (mentioned by the group co-owner but undisclosed as yet)
  • Highlanders Alloys LLC (New Haven, USA)

[edit] Steel mills

  • Dnipropetrovsk Metallurgy Kombinat named after Petrovskyi (Dnipropetrovsk)

[edit] Oil industry

According to the media, Privat Group owns significant shares in Ukrnafta and NPK Halychyna, controlling their business. Ukrnafta is the half-state-owned national oil company, dealing with extraction of petroleum and gas condensate, as well as retailing gasoline through its large gas station network. NPK Halychyna owns and operates an oil refinery in Drohobych, Lviv Oblast.

The group also recently acquired control over Illichivsk Fuel Terminal Company, operating the oil & petrol terminal in the Black Sea port of Illichivsk.

[edit] Chemical industry

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[edit] Food industry

Privat Group owns the Dnipropetrovsk-based “Biola” soft drinks company.

The group may also control sugar beet processing plants throughout Ukraine.

[edit] Energy industry

In 2005, Privat Group bought controlling shares in five companies that fully control electricity distribution in Ivano-Frankivsk, Poltava, Sumy, Chernihiv and Lviv Oblasts. The names of these companies are the name of the respective oblast with the -oblenergo ending, e.g. “Poltavaoblenergo”.

[edit] Banking

Privatbank, the core of the group, is one of the largest commercial banks of Ukraine.

[edit] Media

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Privat Group officially controls the Privat-TV regional television channel in Dnipropetrovsk. Ihor Kolomoyskyi, one of the group's co-owners, brought a court suit demanding the right to purchase a controlling stake in Channel 1+1, a popular nation-wide TV company. According to media, Privat Group also controls the UNIAN news agency and Kommersant-Ukrayina newspaper, the Ukrainian edition of the Russian Kommersant business newspaper.

[edit] Sports

Privat Group indirectly owns (or is linked to) the FC Dnipro Dnipropetrovsk professional football club. According to the media and state officials, the club is involved in the group's chain of trading companies.

[edit] Relations and controversies

Privat Group is involved in a permanent and fierce business conflict with Ukrainian oligarch Viktor Pinchuk and his Interpipe Group. The groups are based in Dnipropetrovsk Oblast, sharing a long and complicated history of relations. Presently, the conflict focuses on the bilaterally-owned Nikopol Ferroalloys Plant (Interpipe now controls the plant’s business). Both sides apply full-scale legal, public relations and political methods in the conflict. Ihor Kolomoyskyi (the main owner of Privat Group) and Pinchuk sometimes insult each other in their interviews.

In March 2006, Henadiy Korban, one of Privat Group's top managers and public critic of Pinchuk, survived an assassination attempt in Dnipropetrovsk (his bodyguard was seriously wounded).

Before the Orange Revolution, Privat Group had been widely regarded as relatively uninvolved in politics, but loyal to the Leonid Kuchma regime. After the government change, the group's owners, according to media, became close allies of Yulia Tymoshenko (although she publicly denies this). Analysts agree that some of Tymoshenko's decisions as the Prime Minister of Ukraine supported Privat side in conflicts.

Some sources state that Privat Group provided significant financial support for Viktor Yuschenko during his presidential campaign and subsequent revolution.

[edit] See also

[edit] References

Inline
  1. ^ "The Privat group considers itself non-existing at all. The ghost register for the semi-gost group is a normal situation.""Attempt №7", Zerkalo Nedeli, September 3-9, 2005. in Russian, in Ukrainian
General

[edit] External links