Group DF Press Statement Regarding Possible Expropriation of Two OSTCHEM Plants

On June, 5, Arseniy Yatsenyuk, Prime Minister of Ukraine, made a statement regarding possible expropriation of two OSTCHEM plants by the government in case they do not pay for consumed gas. We consider this statement to be provocative and aimed at manipulating public opinion with a view to redistribution of the mineral fertilizer market.

We declare that debts of the plants named by Prime Minister were accumulated during 2010-2011, i. e. before entering Group DF. OSTCHEM acquired these plants on the secondary market and did its best to restructure and pay off debts accumulated earlier and provide thousands of chemists with jobs.

Currently both plants are ceased as a result of politically motivated actions of officials representing People’s Front political party. They have unlawfully arrested natural gas owned by OSTCHEM, a core raw material for mineral fertilizer production. As a result, dozens of thousands of people can lose their jobs. Actually, the whole group of connected industries will suffer, especially agricultural sector. We emphasise that our plants kept operating while it was possible despite all the difficulties and incessant political pressure.

The cost of unlawfully arrested gas of OSTCHEM plants amounts to UAH 3.8 billion. State-owned companies, particularly, Odessa Port Plant, owe the fertilizer group over UAH 4 billion. Furthermore, OSTCHEM didn’t take any measures to recover these debts understanding difficult economic conditions in the country. Totally, government entities’ debts to OSTCHEM and the cost of unlawfully arrested gas amount to about UAH 8 million, which is almost twice more than OSTCHEM plants’ debts to the government. Nevertheless, the government, being aware of this fact, actually have started a corporate raid on our business.

We regard Prime Minister’s statement about expropriation of our plants as inadmissible. Such populist appeals not only deceive people but also destabilize business and undermine country’s reputation in the eyes of investors. Authorities should think of consolidation of the society and breakup of the economic decline rather than of their political ambitions and asset redistribution.    

We declare that our plants will start operating as soon as unlawfully arrested gas is released. Besides, Group DF, being a responsible employer, will continue paying salaries on the ceased plants relying on constructive stand of the government.