Ukrainian oligarch Rinat Akhmetov went to war, but he might return as a businessman – this is the main result of the last year for the country’s richest man.
Akhmetov lost more than half of his fortune in almost a year of war, but remains No. 1 in the list of the country’s richest businessmen.
In the Forbes ranking for December, he was credited with $4.4 billion against $13.7 billion a year earlier.
NV Business summarizes the results of the year for the country’s richest oligarch: what he lost, apart from money, and what he did to stay on top, even after victory comes.
Step into publicity
Over the past year, Akhmetov gave many interviews and comments to the mass media. This is extremely unusual for the owner of the country’s largest private company, who previously answered only football questions mainly on his own Ukraine television channel. Only one major non-football interview was mentioned in the Ukrainian mass media over the past 20 years – the businessman spoke personally with the Dzerkalo Tyzhnia media outlet back in 2000.
What can this indicate? For all its horror, the war proved to be the perfect occasion to change society’s perception of Akhmetov and give him an opportunity to step out of the shadows, especially since Akhmetov’s business is reportedly doing everything possible for victory. His metalworking plants are manufacturing anti-tank hedgehogs and metal dugouts, while energy specialists employed by his power companies are saving the country from darkness.
In his latest interview with the Washington Post, Akhmetov even recalled a dark period of his life.
“I’ll tell you honestly, I earned my first capital by playing cards,” he told the Post.
“And this is what I’ve learned: Cards are about tactics and strategy, an analytical mind-set, a practice-oriented approach, and an ability to win.”
However, Akhmetov has not just faced challenges from the war, but also in his unstable relations with the Ukrainian authorities – painfully accepting the implementation of the so-called law on oligarchs on June 30.
So he played ahead.
Exit from the media…
As a rule, the richest Ukrainians lose in the media business, not earn. But the decision to abandon the media business entirely caused perhaps the biggest uproar around the businessman in mid-2022. At first it was hard to believe: Akhmetov, of his own free will, returned broadcasting licenses owned by his media conglomerate to the state. And not only of his highly-rated Ukraine television channel, but even the niche television channels such as Football 1, 2, 3.
“This is a difficult and forced decision that I made with a heavy heart,” Akhmetov told the Italian newspaper Corriere della Sera.
He did not hide the reason: this is the way the country’s top candidate for the position of oligarch No. 1 tried to get out of the so-called law on oligarchs.
CONTEXT. According to the law, there are four criteria that an “oligarch” must meet: participate in political life; have a significant influence on the mass media; control monopolistic enterprises; have assets, the value of which exceeds one million subsistence minimums in January of the corresponding year (UAH 2.19 billion ($59.8 million) at the time of adoption). People who fall under three of the four parameters will be legally limited in their business and public influence and will become “uncomfortable” partners for legislators and officials.
...and from politics
A week prior, the Ukrainian government lost another argument that they authorities could have used to grant Akhmetov the official status of “oligarch.” On July 6, Vadym Novynskyi, a long-time partner in the metalworking and agricultural businesses, and thus a person affiliated with Akhmetov, resigned his parliamentary mandate.
However, half a year later, Novynskyi received a different status from the state. On Dec. 1, the National Security and Defense Council introduced personal sanctions against him.
The reason, most likely, lies in the businessman’s non-business activities. Novynskyi has been unofficially influencing the Ukrainian Orthodox Church of the Moscow Patriarchate – now the Russian Orthodox Church of Ukraine – for many years.
The Metinvest company owned by Akhmetov and Novynskyi immediately stated the sanctions do not affect the company’s business.
The steel machine almost stopped
For Akhmetov’s metalworking business, last year began not with the war, but with summing up the results of the previous year. And they were great – the company earned $4.65 billion in net profits.
But the results of 2022 have been catastrophic. Due to the loss of Mariupol, most of the company’s metalworking facilities in Ukraine were captured or destroyed. To understand the matter, consider that in the completely calm year of 2021, the Azovstal and the Illich Iron and Steel Works produced a total of 8.2 million tons of rolled steel. Other plants, such as Kametstal and Zaporizhstal, produced 5.8 million tons. The Avdiyivka coke plant was mothballed in March due to the war. Meanwhile, Akhmetov’s surviving factories are not working at full capacity, as they cannot use ports to export their products. The billionaire is only comforted by the fact that the mining and processing plants that produce iron ore were not affected. Akhmetov lost billions, and has promised to claim them from Russia. As many as 16 of the oligarch’s companies have filed lawsuits against Russia to the European Court of Human Rights, though this case will definitely drag on for years.
Since the beginning of the full-scale war, Akhmetov’s DTEK energy holding has survived more than two dozen missile attacks on its facilities. Enemy missiles have, in one way or another, affected all of DTEK’s thermal power plants (TPPs). The connection with the Luhansk TPP in the town of Schastia has been lost since the beginning of spring, while the Zaporizhzhya TPP in Enerhodar has been stopped. According to Akhmetov, about 500 MW of wind generation has been left in the occupied territory – half of all DTEK’s green energy generation.
According to the results of the year, the company’s losses may reach UAH 20 billion ($546.9 million), DTEK Energy CEO Ildar Saleev warned in an interview with Forbes. However, energy specialists continue to repair equipment and look for scarce components.
Despite these losses and damages, Akhmetov is not going to give up on this business. The latest example of his perseverance: in December, the company announced the redemption of its eurobonds due in 2027, for a total of $80 million, paying up to 27% of the face value for them.
A long game
The war continues, and all of this are just the interim results. In addition, surprises can be expected from the Zelenskyy administration, which is continuing the course of de-oligarchization. The President’s Office is currently refraining from active actions against Akhmetov, but they are paying attention to everything he is doing.
However, unlike many other top businessmen, Akhmetov continues to expand his business activities in Ukraine. Despite the war, the Metinvest university, which was intended to open in Mariupol, opened its doors. On Sept. 19, more than 150 students enrolled in first- and second-year bachelor’s degree programs, and almost 200 people will obtain a master’s degree. Students will study in a dual education format.
The businessman has also repeatedly stated that he hopes to restore his metalworking plants in Mariupol. But until this is possible, his companies are starting on the construction of a new plant abroad.
In the spring, Akhmetov’s business holding put into operation the Mostyska container terminal on the border with Poland, in which it had invested more than $15 million.
But will this keep him out of trouble with the government in the future?
“I think all of us, both the president, the government, business, and every Ukrainian, want Ukraine to be free, strong and successful,” Akhmetov told NV Business in an interview last summer.
“I believe Ukraine should become a full member of the European Union as soon as possible. And the rules and relations between the government and business have been prescribed for decades there. We must live and build the country according to these rules.”