10 July 2018, Tuesday, 20:36 284

Group DF: Court Decision To Terminate Agreement Between SPF And Cyprus-Based Tolexis Trading Unjustified, Politically Motivated

Editor: Daria Zubkova

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The Group DF group of companies considers the Zaporizhia Regional Economic Court’s decision to terminate the agreement between the State Property Fund and Cyprus-based Tolexis Trading Limited (affiliated with Group DF) on establishment of a limited liability company called Zaporizhia Titanium and Magnesium Plant (ZTMK) unjustified and politically motivated.

The press service of Group DF announced this in a statement, the Ukrainian News Agency reports.

"Group DF is surprised by the Zaporizhia Regional Economic Court’s decision to terminate the agreement between the State Property Fund of Ukraine and Tolexis Trading Limited on establishment of the Zaporizhia Titanium and Magnesium Plant LLC and considers the decision unjustified and politically motivated. The group is confident that it is right and it will challenge this decision in Ukrainian and international courts," it says.

According to the statement, Tolexis Trading Limited spent significant resources to pay off the plant’s debts, because of which the plant faced the threat of complete shutdown.

In particular, according to the statement, the company paid more than USD 800,000 to the Pension Fund to cover the debts that ZTMK accumulated when it was in state ownership.

According to the statement, ZTMK resumed profitable operation after Tolexis Trading Limited began managing it and the state began receiving dividends annually for the first time in the history of the plant.

Besides, according to the statement, despite the crisis in the country, the plant has launched a large-scale modernization program, underwent a number of international certifications, and begun selling its products to the Chinese and European markets.

The plant has made a net profit of UAH 480.4 million and paid more than 135.6 million in dividends to the state since 2013, the statement said.

Meanwhile, according to the statement, Tolexis Trading Limited has decided not to pay itself dividends and instead use the money to support the operations of the plant.

According to the statement, ZTMK is now one of the largest taxpayers and employers in Zaporizhia while employing more than 3,500 people.

Since 2013, the plant has transferred UAH 843.6 million in taxes and other mandatory payments into budgets at various levels.

The destabilization of the plant’s operations due to the ongoing litigation could lead to a shutdown of the plant, loss of jobs, and disruption of international contracts, the statement said.

The Specialized Anti-Corruption Prosecutor's Office announced on July 9 that the Zaporizhia Regional Economic Court had fully upheld a claim in which it asked the court to terminate the agreement between the State Property Fund and Tolexis Trading Limited on establishment of the Zaporizhia Titanium and Magnesium Plant LLC on the basis of the state-owned enterprise of the same name.

The Specialized Anti-Corruption Prosecutor's Office said it filed the court claim because of the investor's failure to fulfill its obligations.

As Ukrainian News Agency earlier reported, the State Property Fund selected Tolexis Trading Limited (Cyprus) as the non-state partner of the state-owned Zaporizhia Titanium and Magnesium Plant (ZTMK) at the end of 2012. The relevant agreement between the State Property Fund and Tolexis Trading Limited was signed in 2013.

The agreement on establishment of LLC ZTMK was signed on February 22, 2013.

The ZTMK is the sole producer of titanium sponge in Ukraine.

Group DF is a diversified international group of companies with businesses in 11 countries in Europe and Asia.

The group’s main areas of operation are in the nitrogen fertilizer, titanium, and gas industries.

The founder and owner of Group DF is businessman Dmytro Firtash.