Zaporizhzhia Titanium and Magnesium Plant (ZTMP) returns to the state ownership: the appeal decision entered into force

On November 30, 2021, the Central Economic Court of Appeal upheld the decision of the first instance on the return the Zaporizhzhia Titanium and Magnesium Plant into state ownership. Before the court ruling, 49% of ZTMP LLC belonged to Tolexis Trading Limited (DF Group).

“The victory in the Court of Appeal is the result of the hard work of the State Property Fund and the Specialized Anti-Corruption Prosecutor’s Office teams”, Dmytro Sennychenko, Chairman of the State Property Fund, noted.

In addition, he spoke that the decision on the return ZTMP to state ownership entered into force and will be implemented in the near future.

“The final decision on the return ZTMP to state ownership will allow attracting a competitive and honest investor, who, due to continued modernization and effective management, will turn it into a powerful industrial asset”, Dmytro Sennychenko said.

Briefly

In August 2021, the Economic Court of Zaporizhzhia region, upon the claim of the Specialized Anti-Corruption Prosecutor’s Office in the interests of the state, represented by the Fund as a plaintiff, ruled that Tolexis Trading Limited, after receiving in 2013 a share of the newly created ZTMP LLC, did not fulfill its obligations to make investments in the modernization of the enterprise in the amount of 110 million US dollars in the period from 2013 to the 1st quarter of 2015.

 It was proved in court that the enterprise was transferred to the management close to the investor, despite the fact that the state’s share in ZTMP LLC was 51%.The appointed management spent the raised $ 110 million to pay off the previously arisen debts of ZTMP LLC to creditors associated with Group DF for energy resources.Later the funds were transferred to the accounts of offshore companies.Later, the funds were transferred to the accounts of offshore companies, and only UAH 20 million was spent on the modernization of the enterprise.

The joint actions of the SPFU and the new management of ZTMP LLC have already allowed to eliminate corruption schemes, to unblock the company’s accounts, to conclude direct contracts for the supply of electricity with state generating companies, as well as to restructure existing debts.In addition, the modernization has begun and the first new bipolar electrolyzer, which saves about 30% of electricity, is already in operation.But today the situation with a company is still critical due to the sharp rise in energy prices and the accumulated billions of dollars in electricity debts by the previous management.