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Dutch Firm Buys Major Ukrainian Steel Mill

The highest initial bid was $2.5 billion (official site) 24 October 2005 (RFE/RL) -- Ukraine's largest steel mill, the Kryvorizhstal plant, was sold at auction today for $4.8 billion to the Netherlands-based Mittal company.

The company went up for auction today for a second time, in the country's largest post-Soviet privatization.

"What happened today proves that Ukraine is capable of carrying out an honest privatization, following all legal procedures," Ukrainian President Viktor Yushchenko said today, RFE/RL reported. "The Ukrainian state has proved itself. The Ukrainian nation received a well-deserved compliment for the suffering it has endured for many years during the privatization process."

Three firms initially submitted bids to buy the plant, and the opening of their bids was broadcast by Ukrainian television.

The starting price was $2 billion, although Yushchenko's government hoped for more.

The highest of three initial bids today -- $2.5 billion -- came from Industrial Group, a consortium led by the French steel giant Arcelor. The other bids, for just over $2 billion each, were from Dutch-based Mittal and a Ukrainian group with Russian connections, LLC Smart.

The three bidders then began competing against one another with fresh offers, while Yushchenko and other top government leaders watched.

In 2004, Kryvorizhstal was sold for $800 million to a group of industrialists with close ties to former president Leonid Kuchma.

Yushchenko called it "theft" and court rulings struck down the sale.

(With Reuters and AP reports)